LendInvest predicts surge in buy-to-let remortgaging
A surge in buy-to-let remortgaging is being predicted for 2022 but lenders are being urged to simplify the process.
Alternative property lender LendInvest has highlighted that many landlords will have rushed to secure buy-to-let mortgages in 2017 ahead of new regulatory changes that introduced affordability and interest rate stress tests for borrowers.
The lender warns that many will now be coming to the end of long-term five-year fixes but could be hit with the clunky systems of traditional lenders.
“The expected rise in the remortgage market is due to the Prudential Regulation Authority changes brought in five years ago, which saw a lot of borrowers remortgage to avoid any complications or extra difficulties posed by the rule changes,” Andy Virgo, buy-to-let director for LendInvest, said.
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“Borrowers didn’t remortgage five years ago to be welcomed by a more complicated process now.
“How lenders have ridden those changes and made the process simpler is of huge importance, and making these remortgages the simplest they’ve ever been through technology will play a large role.”
LendInvest suggests lenders could now use open banking to speed up the underwriting process and must offer a broad and long-term product range.
“The market is different now than it was five years ago,” Virgo said.
“Holiday lets are surging in the UK, and landlords find themselves remortgaging in a climate where the push to net zero is underpinning all areas of government policy, which includes the rental sector.
“A broad product range that can support change of purpose and support landlords into the future is essential.”
He said it was also important for lenders incentivise landlords to meet their climate obligations through better energy performance certificate ratings and the platform does this by offering lower rates to borrowers with more energy efficient properties.
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