ROUNDTABLE
BUY-TO-LET converting existing buildings from commercial to residential and adapting property on the high street. Hewitt agreed with Luhmann that converting old buildings is a good way to narrow the gap between supply and demand. “Any property coming to market right now is being snapped up very quickly, even given the price increase and cost-of-living crisis,” he said. “I think the answer is to build more properties, but it is about it being the right properties and in the right location. We have seen a lot of building over the last 10 years in terms of apartments, and the city life is something that is starting to slowly feed back into demand.” According to Cook, property investors have been buying office blocks with the intention of converting them, but he explained that it comes down to desirability – the properties have got to look good for people to want them. “They have got to look good, feel good, sound good – and they cannot be cramped or still resemble an office building,” he added. He believes that it is down to the private rented sector to take it on itself to improve properties to a good standard. Meanwhile, Valvona believes that the answer to balancing supply and demand is a political question and not one for lenders and brokers. “We have seen the demise of the Help to Buy scheme, which has meant fewer people are able to buy properties and therefore more people want to rent,” he said. Valvona believes, facilities are needed to help people develop properties, whether on a light-refurb or heavy-refurb basis. Funding for developers – and how to provide this – is also an essential part of the mix. He has seen this topic debated many times by industry experts, and there is no one clear-cut answer. “COVID has meant tomorrow’s tenants are still on the verge of making the move out from their home, or from whatever property they were stuck in, so that rush of tenants coming to the market has returned now that they have managed to save some extra cash for a deposit,” Virgo said.
“I am expecting a lot of remortgage activity on the back of the five-year fixed rates concluding, as well as from borrowers trying to lock in a long-term rate now” BARRY LUHMANN GREATEST BROKER MISTAKES When looking to the greatest mistakes made by brokers when discussing buy-to-let mortgages with their clients, Cook points to tax advice or the lack thereof. In addition, he mentioned limited company issues and the supply for this type of mortgage as an area in which brokers often make mistakes. Valvona agreed with Cook that taxation advice is a regular error, with brokers often misinformed after being drawn into a conversation by their clients. He explained that brokers will often recommend a taxation specialist to their clients, but in some cases, customers push their brokers for tips on tax that can, ultimately, be incorrect. “I think if we are honest, we have all had those conversations with brokers in which they have strayed into advice without really realising it,” he said. “The second mistake I think brokers are making is recommending a five-year fixed rate or even a seven-year fixed to a client on a property that has a low EPC rating without adequately going into the client’s responsibilities in bringing it up to a C.” Luhmann explained that as far as he has seen, landlords have been coming to lenders with low-rated EPC properties. He believes that education is key and explained that brokers need to inform their clients of the potentially imminent government changes. “I think there is a lack of care, a lack of education,
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