The days of simply finding the ‘best’ mortgage rate for landlord clients and moving on to the next one are numbered. Today's successful buy-to-let brokers are discovering that their role is evolving far beyond finding a mortgage deal. 

With the Renters Rights Bill on the horizon and EPC minimum standards looming, landlords face an increasingly complex regulatory landscape. The decisions landlords make now will have consequences much further down the line. This presents an opportunity for brokers to set their clients up for success once the next mortgage or remortgaging decision comes around.

The broker as a guide

What we’re seeing is a shift from brokers helping landlords make good decisions that make sense for now, to supporting them to make decisions that will still make sense a few years down the line.

Take for instance the end of Section 21 removals, which will make evictions more difficult. Making landlords aware of the importance of selecting the right tenants from the outset is becoming vital to the long-term health of their property portfolio. Similarly, consider the introduction of minimum EPC standards. Brokers may flag properties that don’t have at least a C rating as a higher-risk investment to their clients.

Brokers may also choose to study Bank of England Base rates and SWAP rate trends, opening discussions on the timing and terms of mortgage deals that are most likely to yield better results.

Brokers who see themselves as guides on the property-investor’s journey turn the broker-client relationship from one-off transactions to an ongoing strategic partnership.

The risks of being passive

As a mortgage adviser, brokers need to consider the full lifecycle of their clients’ investments. This means recommending the most suitable mortgage product for the client’s goals.

Imagine a client's five-year fix ends in 2030 and they need to remortgage. If their property doesn't meet new EPC minimums, they may not be allowed to let it legally. This could make remortgaging impossible until works have been done. Brokers may factor the costs of a retrofit into the mortgage calculations. This could include advocating for a longer term so the client can save more monthly in the short-term to put towards a retrofit.

Or consider a landlord who wants to buy a property in a prime location with rental income that only just makes the ICR requirements. Under the Renters’ Rights Bill, they may be unable to raise the rent enough to match rising costs, especially if the property grows in value. If the property’s value jumps but rent lags, they may fail lenders’ stress tests at remortgage, forcing them onto an expensive variable rate with few options to fix costs.

With this comes a rise in portfolio landlords, various tax implications, and more landlords choosing to purchase through a limited company. Brokers therefore, need to get better at retrieving the best value from a changing competitive landscape.

If brokers fail to flag potential problems early, they're not just missing opportunities; they're facilitating client churn as disappointed landlords seek advisors who better understand the bigger picture. 

Helping clients make sense of their property investments

As regulatory changes approach, the success of the broker relies on how well they can prepare their clients for the parts of the law that will affect their mortgages and properties.

Brokers can guide landlords by helping them think of the future potential in their property while flagging potential risks. Market dynamics, competitive positioning, and long-term viability all become part of the discussion.

To do this, brokers must stay ahead of regulatory changes and market developments themselves. This means studying the landscape regularly, understanding new and upcoming compliance requirements, and anticipating how changes will impact different client situations.

Why brokers should embrace the evolution

Right now, there is a significant opportunity for brokers who are willing to adapt their service model. By becoming comprehensive advisors, they create revenue opportunities beyond traditional mortgage commissions. They also build stronger client relationships that generate ongoing business and new referrals.

The modern BTL market requires a modern broker. Those who simply stick to the ‘best deal now’ mentality could see clients migrate to competitors who better understand their evolving needs. The best-placed brokers will be those who can work with a lender to find the optimal solution for borrowers.

At West One we help brokers stay one step ahead. Find out more by calling 0333 123 4556 or visiting https://www.westoneloans.co.uk/buy-to-let-mortgages