Following the move by a host of lenders to offer a more flexible affordability based model, an intermediary, who wished to remain anonymous, suggested that lenders were desperate to increase turnover and had reduced the costs on their products, while increasing the associated fees.
He said: “We have seen some lenders increase the arrangement fee on the deals of buy-to-let deals, to up to 1.5 per cent. This seems really high, and I think property investors will start to reconsider their moves in the market. Most of the lenders in this field have reduced their rental calculations, but upped their associated fees.”
He added: “I think it is taking advantage of people who are struggling with affordability but want to invest in property within the buy-to-let market. Introducing fees of up to 1.5 per cent does not seem fair, even with the reduced product pricing. It seems like an act of desperation by the lenders to increase business.”
However Paul Hunt, head of marketing at Platform, argued the recent trend allowed for greater borrower choice within the buy-to-let market and highlighted increasing product innovation.
He said: “Over the past year, lenders, including ourselves, have adjusted their offerings within the buy-to-let market. Traditionally deals were based on rental income, so lenders have made changes to this, but increased the fee. Rather than being a negative, this provides another option for borrowers. The borrower still has the option of the more traditional fees but this move could open up the market to more people and give them more choice.”
He added: “We have to have some way of recouping our costs but it is just an option. Borrowers don’t have to go down this route.”
