The Intermediary – October 2025 - Flipbook - Page 35
BUY-TO-LET
Opinion
Does ‘vanilla’
actually exist?
S
ome years ago, it was
a lot more common
for the ‘vanilla’ case to
come across an adviser’s
desk. First-time buyer,
employed for years,
one bank account each, deposit
meticulously saved and a credit card
cleared each month.
Fast-forward to now, and we’re
oen seeing the same first-time buyer
scenario, but there are five Klarna
accounts, PayPal ‘Pay in 3’, phone
loans alongside their phone contract,
Personal Contract Purchase (PCP) car
finance and also two missed payments
due to having multiple credit accounts
that are hard to keep on top of.
Even with buy-to-let (BTL), the
complexities are now greater than
before. Personal BTL isn’t as common
as it once was, so now the broker has
to check the structure of a limited
company, ensure the SIC code aligns
with the lender criteria, determine
where the deposit funds originated
from and whether there are any loan
agreements in place, and so on.
Landlords are also looking for
more lucrative investments. This
isn’t always the standard residential
property that’ll house a family
long-term, but multi-unit freehold
blocks (MUFBs), houses in multiple
occupation (HMOs) and bulk
portfolio purchases.
JONATHAN FOWLER
is founder and managing
director at Fowler Smith
Mortgages & Protection
Complex competition
The increasing complexities in
our industry have their benefits.
They force lenders to consistently
review their offering and adapt to
ensure they’re still geing sufficient
business levels. It also causes greater
competition in the market, with niche
lenders plugging gaps to cater for
certain case or client types.
It also prompts brokers to learn
more and gain more valuable
knowledge and insight that will no
doubt continue to grow.
Whatever way we look at it, these
changes ultimately benefit the client,
but this has to be looked at – in my
opinion – at a more macro level.
Those looking for a mortgage at
present, even if their case is supercomplex and complicated, are likely
to be able to find a lender via a broker.
Even if lending multiples have to
be increased to well over five-times
income, we brokers know that there’s
Full of flavour: Increased complexity in the market has its benefits
likely an option. Even if they have no
deposit, or very minimal, again there’s
likely to be an option.
This is a great thing for the end
consumer, and as brokers we have
even more tools at our disposal, so we
very, very rarely have to say no.
However, I oen consider the
implications this might have for
people’s financial astuteness going
forward. Are mortgage holders likely
to be a lile more lax with their
finances, as they know there’ll likely
be a way ahead for them?
This is a lile different with buy-tolet, however, as it’s oen a scenario of
ensuring rental figures work and the
property is suitable, and I think lender
appetites increasing on more and more
complicated scenarios, tenancy types
and structures is inherently positive.
But with residential, I feel that surely
there will become a time that lenders
have to pause making everything
possible for clients to ensure good
conduct going forwards.
This is where we can step in as
knowledgeable industry professionals.
Being an adviser is far more than just
finding a home for a scenario there
and then. We have a duty of care
to pass on knowledge of financial
wellbeing and promote this in our
communities.
Does the vanilla case exist anymore?
Probably not. Geing credit is quicker
and simpler than ever. But the
implications of knee-jerk financial
decisions have lasting implications on
current, new and future borrowers.
We all have the platforms to do
more, educate as well as advise, and
now is the time – more than ever – to
be doing so. ●
October 2025 | The Intermediary
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