by: Hannah Uttley

Industry heavyweights have raised concerns over the plausibility of The Mortgage Works’ move to pilot a direct-to-consumer buy-to-let proposition, questioning whether customers will receive appropriate advice, particularly in the current climate. Brokers said that the timing of TMW’s pilot “raised a few eyebrows” with upcoming changes to underwriting standards set to take hold of the sector, alongside tax restrictions and higher Stamp Duty costs imposed on landlords. David Whittaker, CEO of Mortgages for Business, said it was a “significant” move for intermediary-only TMW to target direct customers.


“TMW exists for a sole purpose and that is to support the intermediary market,” he explained. Whittaker also cited a growing demand for limited company buy-to-let mortgages, which are not available through TMW. Findings conducted by Mortgages for Business show that more than 70% of purchases through the firm are being taken out in a limited company. The appetite for limited company products also meant customers need to be challenged on whether they have received appropriate tax advice, Whittaker said.


Ying Tan, managing director, Buy to Let Club, agreed: “Without a doubt, customers need choice, they need to understand the difference between owning via a limited company structure and a personal structure and they need lots of different choices between a specialist lender, high street and vanilla lender. “Given the various tax and PRA changes the need for specialist advice is more important than ever.” Recent moves by large lenders to retain clients using direct marketing tactics have caused consternation among brokers, with some saying they planned to boycott firms that pursued such a strategy.


John Charcol’s product technical manager Simon Collins, said if TMW’s direct offering competes with what is on offer to intermediary partners, brokers were likely to find reasons not to direct their client through the lender.


He added: “The timing does raise a few eyebrows because now more than ever you’ve got to make sure that a potential client has been given tax advice before they commit to a particular buy-to-let deal. With the current regime, you can’t just show someone a range of buy-to-let products and let them pick before they’ve had proper tax advice and are aware their gross rental income is going to push them into a higher rate tax bracket, for example.

“If anything, I might have expected lenders to go the other way and focus their efforts more on the intermediary market.”

Nationwide declined to comment further.


Maybe add to the above my thoughts:


Marcus Rolle, Director of One Stop Finance Ltd, echoed David Whittaker’s sentiments and suggested it was madness for a lender that only offered its services via intermediaries to be planning to offer a direct to public product. Presumably they plan to offer it via their parent, Nationwide, through its branch network.


Given the likely experience of the people on the ground, and the huge changes taking place in the BTL arena over the coming months, it does not seem like the most sensible business strategy to be advancing when close to 100% of their business comes from the more qualified and experienced intermediary network.


Rolle also pointed to other articles he, and his fellow Director Steve Burkin, have published recently outlining the raft of changes that are hitting BTL borrowers and will continue to hit them from April 2017 onwards.


More than ever borrowers need the whole of market advice that comes from using a broker and not mortgage providers venturing into new advice territories presumably with a remit to simply grow their market share!


Here’s a thought. Why don’t lenders stick to lending their money and then solely rely on whole of market brokers recommending their products? Surely best advice, one of the mantras of the Financial Conduct Authority (FCA), requires every client to seek out a broker to compare the market as no one lender can proport to be providing the best solutions for the market.


For those wanting the benefit of a broker, with 30+ years of experience, then you won’t go wrong in talking to One Stop Finance on 020 8441 2605 or 0142 232 272 or visit our web site at if you want to find out more about our company and the experienced people that are at the core of our service.