- Blog
- 9 December 2024
Steve Cox
Chief Commercial Officer
Steve Cox
Chief Commercial Officer
Originally published by Mortgage Introducer
Mortgage brokers should be assured of their place in the market and their ability to continue making money, with the outlook for 2025 looking positive, according to an industry executive.
Steve Cox (pictured), chief commercial officer at specialist buy-to-let lender Fleet Mortgages believes the coming 12 months will probably be quite similar to the last couple of years, with the added potential benefit of – hopefully – rates coming down further.
This, Cox believes, is particularly a positive for landlord borrowers who have experienced high rates in recent years.
“We have borrowers remortgaging now that last had to refinance in the aftermath of the mini-budget, so there are already price positives here to be secured and as the year progresses my view is that rates will continue to inch down, although with some in-built volatility generated by worldwide events,” Cox told Mortgage Introducer.
“The direction of travel is fairly positive though, and given that advisers currently write 90%-plus of all mortgage business, they should be positive about their own place in the market, and their ability to keep on servicing clients and generating income.”
Despite Chancellor Rachel Reeves’ Budget decision to revise Stamp Duty rules, Cox remains upbeat.
“Clearly no-one in their right mind would suggest that increasing the stamp duty surcharge for additional property purchases would be a positive, but there are ways to mitigate against this in terms of price negotiation,” he said.
“We’re still very positive about the buy-to-let market simply because it’s a specialist market and we’re a specialist lender that understands how the market has shifted, and how landlords now act. The fact of the matter is that demand far outstrips supply in the PRS, and as a result if you are active within it, if you can meet affordability, if you can secure strong funding at a good price, then you are going to benefit from rising rents and rising house prices.”
He added: “As always, the full benefit will be over the long-term but as an asset class it is still going to be heavily favoured by many.”
Were the Government’s EPC targets expected?
While Labour’s reintroduction of targets to bring all rental properties up to EPC levels A to C is arguably an additional headache for property investors, Cox believes it was always on the cards.
“Even after Rishi Sunak pulled the plug on previous deadlines to improve private rental sector property EPC levels, I think there were few landlords who didn’t anticipate a Labour government would reintroduce them,” he reasoned.
The fact that these targets have been pushed out to 2030 doesn’t detract from the fact that the sooner landlords can get their properties to an EPC C or above, the sooner they will be able to access mortgage products which offer a discounted rate, Cox suggests.
“Extra costs are always going to be thought about seriously, however as we’ve seen, the difference between having a property at EPC Level D, for example, and getting it up to C, can be very little,” he commented
“Major works on a property are of course something different, and there may be some landlords who are weighing up what they do with those properties going forward. I think you’ll see very few landlords exiting the market because of this. What they might seek to do instead is manage the portfolio – selling those properties that might cost a great deal to upgrade and replacing them with properties already at the required level.”
He continued: “There is clearly a need to keep talking about this, because – unless we hear otherwise – this deadline will not move. Landlords whose properties don’t make the required level will not be able to let them out from 2030, and if you know that your property requires a considerable amount of work, then it is better to begin thinking about how you will fund this now, rather than later.”
So, what particularly is his advice for brokers about helping alleviate the stress that landlords might be feeling?
“By knowing the EPC level of your client’s property, you have the perfect opportunity to communicate with them about the deadline, the requirements, and how you’re able to help them,” Cox noted, “plus you can also point out the benefits that can be had – cheaper mortgages, etc – plus the fact that tenants are going to increasingly value energy-efficient homes that keep their bills down. Keeping your clients aware of this, putting yourself front and centre with them, improves the chances of you holding on to that client.”