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Buy-to-let product transfers

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 14. September 2023

Looking to speak to brokers about buy-to-let product transfers. Some lenders, as they are non-bank lenders, do not offer product transfers and due to high interest rates customers may struggle to remortgage. 

  • Are BTL clients struggling to remortgage at the moment? What options are available to them if they cannot remortgage/if PT is not available?
  • What proportion of BTL lenders offer PTs versus do not offer PTs?
  • Are more non-bank lenders looking at product transfers?
  • Is the ability to do a product transfer factoring into your advice to BTL clients?

7 responses from the Newspage community

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Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
This year has been carnage for landlords who have had historical low interest rates coming to an end and with many cases unable to remortgage and only left with Product Transfers which are making many landlords think twice about continuing the mortgage or selling up. Not all lenders have Product Transfer options leaving many clients unable to switch products and having to lapse onto a lenders variable rate, as may not qualify elsewhere with a remortgage. This needs to be addressed and quickly.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
The vast majority of buy-to-let lenders offer product transfers. For many landlords, this may be the only option as often the increased stress-test rates do not allow the needed level of borrowing on a remortgage. If neither re-mortgage or product transfer is available, options are to move onto the lender’s standard variable rate, sell the property or explore a lender who may consider top-slicing if the landlord’s income could be utilised.
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Elliott Culley
Director at Switch Mortgage Finance
There are a few BTL lenders that do not offer a simple product transfer route for clients. In the current market of high rates, it can put some landlords in between a rock and a hard place. Some clients aren't able to move lenders due to affordability and end up stuck on the SVR of their existing lender. For most, this is even more unffordable and many contemplate selling the property unless they can find a way of reducing the borrowing somehow.
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
Please take a look at Fleet. I have a portfolio client that has two mortgages with them that have come up for renewal. Fleet have been bought out by Starling Bank so their funding changed. We tried to product transfer the 2 mortgages to a new deal but despite previously agreeing the mortgages for 2 years they declined a new fixed rate as they now do not like the location of the properties meaning the client has to sit on a criminal 8.25% SVR and ultimately becoming a mortgage prisoner. This client cannot move lenders and Fleet are more than happy to charge an extortionate rate all the while they have lower fixed product transfers for other clients.
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Gary Bush
Financial Adviser at MortgageShop.com
A number of Buy to Let lenders offer some form of rate transfer via financial advice firms, however this doesn't help the awful market conditions for the beaten down landlords. The last year of mortgage rate crisis has added a further level of misery for Buy to Let remortgages, the majority of cases just don't fit lenders' requirements now. All lenders are working towards offering some form of product transfer arrangements - they are just waiting for the relevant systems changes to occur to be able to roll them out.
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Mark Andrews
Advisor at Finance Energy
Buy to Let remortgages and product transfers are tough right now but not impossible. I don't think it's about bank vs non-bank lenders as they tend to do the same things. I've certainly always found product transfers available from both business types. It seems to me that to effectively support clients in the BTL sector now you need to be able to advise them on all their investments and do a bit of tax planning also. The solutions to BTL refinancing issues aren't obvious but looking at the whole picture of what assets and investments are in place can make the difference. I think if we traced government policy back it is clear that the intention was to drive the BTL sector in this direction. They wanted it to be more professional in every way. Not just the living standards of tenants, but also the routine use of accountants, brokers, IFA's and other professionals.
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Gary Boakes
Director at Verve Financial
Product Transfers are the BTL savior at the moment, with rates increasing and stress testing harder than ever before, BTL that breezed through in the past no longer fit lender affordability. Luckily, lenders seem to have a focus on existing customers at the moment, so rates offered to existing customers are competitive.