Recent findings from a major study of buy-to-let investors, conducted by buy-to-let specialist Mortgage Trust, has revealed that 70% of buy-to-let landlords review their mortgage arrangements at least every 12 months and 36% of this number look for the best deals on a 6 monthly basis. The mortgage market is always changing and by reviewing their arrangements regularly, canny investors are able to take advantage of favourable deals.
Mortgage advisers are the most popular source of information about current mortgage products, with 60% of landlords turning to them first. The media and best buy tables were also popular with investors. Landlords were cautious of using estate agents for information, and banks and building societies also proved unpopular with investors
Nicola Severn, marketing manager of Mortgage Trust commented: ‘These findings demonstrate that buy-to-let borrowers are financially astute individuals, fully up
with developments in the mortgage market and keen to finance their investments to their best advantage. For this they value highly the expert advice that intermediaries can offer. This underscores the importance to mortgage advisers of fostering personal business relationships with their clients.’
The survey shows that landlords are more astute when it comes to their mortgage arrangements than owner-occupier buyers. Owner-occupiers are far more emotional in decisions regarding their home, buying properties they fall in love with and choosing a mortgage which will secure it for them, rather than necessarily the best deal on the market. They are more impulsive than landlords, who view properties with a hard business head and investment returns firmly in mind. What’s more, landlords are far more experienced in arranging mortgages than their owner-occupier counterparts, as it is an integral part of their business strategy. Getting the right deal is extremely important, as landlords have to see the property in terms of cost and returns.
Nicola Severn of Mortgage Trust says, “Our findings support the view that buy-to-let landlords are serious investors, and not idle speculators. They have a professional approach to their investment and are keen to secure the most cost effective and appropriate funding. They will regularly review their arrangements to ensure that they are getting the best returns on their portfolios. This demonstrates that regulating buy-to-let lending is unnecessary. Lending to informed, professional investors is more like lending to small businesses than individual owner-occupiers, and therefore the same degree of protection is not as necessary.”
