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16 May 2018

David Whittaker, Chief Executive Officer at Mortgages for Business, has today questioned when buy-to-let lenders will make their lending policies public for those properties that fail the new Energy Performance Certificate (EPC) regulations.

Speaking at today’s Financial Services Expo (FSE) Manchester, the premier exhibition for the financial services industry in the North of England, Whittaker suggested there would be major issues for advisers and those clients who hold properties which do not meet the new requirement of Grade E or above.

From the 1st April this year, the new requirement was brought in for private rental properties. Whittaker said: “What will lenders’ position be on properties which don’t make the grade? As of now, only three lenders have made their position clear on it. Clients will need the right EPCs on all their properties. 4.3% of all properties are currently in the worst G rating and over 11% of that number are properties in the private rental sector, so there could be a major issue.”

Whittaker also suggested that any landlords thinking the regulatory and political changes impacting the sector had finished, were likely to be disappointed.

He also told the broker audience to prepare their clients for more interest from HMRC citing research in Newham, London, which found over 14,000 landlords within the borough “had no relationship with HMRC, meaning they were not filing a tax return”. “HMRC are not going to take their hands off the throats of landlords because they sense a lot of tax to be paid,” he said.

There was however a more positive picture painted for the future of the buy-to-let market, with Whittaker suggesting falls in lending were plateauing. “In 2018 we expect there to be £32 billion of gross lending, and this will fall to £28 billion in 2019. However, we do believe this will have bottomed out by 2020 and a reshaped buy-to-let market is where advisers will do very well.”

Whittaker told advisers not to neglect the limited company buy-to-let space as this was growing in size. “I think a third of your buy-to-let business will be in the limited company space,” he said.

Adrian Moloney, Sales Director of One Savings Bank, outlined the growth in this part of the market, with 17 lenders now offering close to 300 limited company products and figures from Whittaker’s Mortgages for Business suggested there was a 50/50 split in terms of overall limited company/sole name business, while 70% of all buy-to-let purchases are now completed within a limited company structure.

For more information please contact Rob Griffiths at White Dragon Communications on: rob@whitedragoncomms.co.uk or 07983 641566.