With the coronavirus crisis and tax changes continuing to hit landlords hard, you could be forgiven for thinking the buy-to-let boom is over.
But speak to mortgage brokers, lenders and landlords and you’ll soon see it’s not all doom and gloom – and that now could be the perfect time to become a buy-to-let broker.
Don’t just take our word for it though. Cat Armstrong is the Mortgage Club Director at Dynamo for Intermediaries – and buy-to-let’s her bread and butter. So we spoke to Cat to find out how to get in on the act.
First things first – why buy-to-let now?
Before we hear from Cat, let’s take a look at why buy-to-let could be the best bet to get your broker business booming.
We all know coronavirus has put a spanner in the works. But before the pandemic started, it was estimated that the number of households being privately rented would reach 25% by 2025. And that renters would outnumber homeowners in the UK by 2039.
And when we spoke to landlords to see how coronavirus had affected them, there was still a sense of optimism in the air.
In fact, there’d been a 70% jump in the amount of landlords looking to increase their property portfolio. And 50% said coronavirus had no impact on their investment plans whatsoever.
With those sorts of figures floating around, you can see why it could be time to say hi to buy-to-let.
50% of landlords said coronavirus had no impact on their investment plans whatsoever.
What area of buy-to-let lending could you specialise in?
Like residential homeowners, landlords come in all shapes and sizes. And that means there are different areas you could choose to specialise in within the buy-to-let market.
You may want to help accidental landlords, who have inherited a property or struggled to sell their home. Or you could focus on certain property types, like multi-unit blocks, HMOs or flats above commercial premises.
Another option could be to set your sights on experienced portfolio landlords, who are likely to be looking for help and advice on capital raising and maximising their profit.
Whatever route you decide to go down, there’s one thing for sure – we’ll always be here to help.
Interview with a buy-to-let specialist
Now that we’ve looked at the current buy-to-let landscape, it’s time to speak to a specialist who knows the market inside out.
Cat Armstrong is the Mortgage Club Director at Dynamo, a national mortgage brokerage, with a mortgage club of around 3000 brokers.
Dynamo, previously known as The Buy to Let Business, won both Best Broker for Buy-to-Let and Best Mortgage Broker at the Mortgage Strategy Awards 2020.
And before becoming a director there, she’s been a buy-to-let broker, BDM and underwriter. So it’s fair to say that Cat knows her stuff when it comes to buy-to-let mortgages.
So Cat, tell us a little bit about yourself and Dynamo.
I’ve worked at Dynamo for 10 years, originally joining the company as a broker after working as a BDM for the specialist lender, Capital Home Loans, and an underwriter for Halifax.
Although Dynamo initially specialised in the buy-to-let market, we now support our clients with residential, second charge, commercial and bridging finance.
I developed a passion for helping brokers find solutions for properties and structures often considered to be unmortgageable.Cat Armstrong, Mortgage Club Director at Dynamo, a national mortgage brokerage
If we focus on the buy-to-let market, what originally inspired you to specialise in this area?
I relish the challenges of the buy-to-let market, particularly being able to explore and understand the different structures needed to accomplish clients’ short and long-term plans.
Landlords are the backbone of our housing market – and they need the support of specialist brokers to ensure they receive the right advice.
We couldn’t agree more. Within the buy-to-let market, do you specialise in any specific area?
I cover all aspects of the specialist lending sector. I find you need to have an understanding of not only the structure a landlord wants to use (for example, a limited company, personal name or trust) but the different types of property out there too.
How did you become a specialist in buy-to-let mortgages?
My journey into the specialist market began with an exciting job opportunity working with Bob Young at Capital Home Loans – a specialist lender in the buy-to-let space.
I developed a passion for helping brokers find solutions for properties and structures often considered to be unmortgageable.
When the opportunity arose to join Ying Tan and the team at Dynamo – and to go from working with one lender to the whole market – I jumped at the chance. And I haven’t looked back since.
What do you enjoy most about what you do?
I love the fact that every day is different. Each case generally has something unique about it and presents a fresh challenge in finding the right solution for the client.
If other brokers were looking to become a buy-to-let specialist, what would you recommend?
I’d suggest that anyone who wants to know more about this space reaches out to the mortgage clubs and specialist packagers in the market. They’ll not only help them place the business, but also explain why they can or can’t get the deal placed.
I’m biased, but I firmly believe my team at Dynamo for Intermediaries is fantastically placed to help any broker develop their knowledge.
And if you had one piece of advice for someone looking to focus on buy-to-let mortgages, what would it be?
Understand your client’s long-term goals. Really getting to know your client and understanding why they’re in the buy-to-let market will help you source the right solution for them and allow you to work with them over the life of their portfolio.
It’s not just about the one deal or property as there’s always a bigger picture and a bigger plan. Look deeper and search for a solution that will help them reach these goals.
What’s the best way for a buy-to-let specialist to stand out in the market?
‘Knowledge is power’ as the saying goes. The best way to stand out is to ensure you keep updating your knowledge.
Things are changing all the time – from simple lender criteria to more complex tax challenges, property licencing and lettings laws. So keeping up to date with changes is paramount to standing out amongst your peers.
What’s been the most challenging aspect of the buy-to-let market over the past few years?
Aside from coronavirus, the change in rental calculations has undoubtedly prompted a massive shift in the way we all have to work.
And finding new ways to support landlords and enable them to continue with their plans has been challenging.
Ah, coronavirus. What problems and opportunities do you think that could bring?
Challenges within the specialist space at the beginning of the pandemic revolved around the money markets – with the vast majority of specialist lenders seeing their funding lines withdrawn or temporarily closed.
But the strength of the buy-to-let market in the UK seems to have reassured these funders and we’re seeing a kind of normality return. That’s brought with it opportunities for brokers to educate their clients and further strengthen their reputations.
Finally, how do you feel The Mortgage Lender helps specialist buy-to-let brokers?
Every person you speak to wants to help in getting the right solution for your client.
That can be from a quick ‘no’, to an underwriter taking the time to go through the case in detail to ensure they understand the structure and onward plans. And in our case, we’re very lucky to have Diane McLoughlin as our dedicated underwriter.
We’re here to help
As Cat says, we always want to help here at The Mortgage Lender. So if you’re ready to get in on the act and become a specialist buy-to-let broker, you know where to turn.
1 – PropertyWire – How will the buy-to-let market look post-September?
2 – BuyAssociation – UK renters are expected to outnumber homeowners by 2039
3 – Mortgage Strategy Awards – The Winners
There’s plenty more where that came from. These ones are on us.
Tuesday 9th March 2021
Coronavirus: The Impact on mortgage brokers
Tuesday 18th August 2020
The Buy to Let Market In 2020 – How Coronavirus has affected Landlords
Sunday 16th August 2020