Mortgage advisers are expecting to encounter more buy-to-let (BTL) customers with adverse credit as a result of the coronavirus pandemic, according to new research by Pepper Money.

In a recent survey among advisers active in the BTL market, Pepper Money found that 43% of respondents said they expect to see more adverse in their cases this year.

According to the research, advisers indicated their BTL customers are most concerned about tenant rent arrears in 2021 (29%), while 25% suggested landlords are most concerned about a potential increase in CGT.

Other concerns raised in the research included mortgage rate increases, falling property prices and property void periods.

Pepper Money sales director, Paul Adams, suggested landlords “have not been immune to the financial impact of the pandemic”, and highlighted that there have been several reports of missed rental payments and lost income.

“It’s unsurprising that so many advisers expect to encounter more BTL customers with adverse credit,” he commented.

“However, our research also found advisers to be confident about the prospects for the BTL market, with strong demand for both purchase and remortgage business. In order to meet this demand, it will be important to work with lenders that are able to take a pragmatic approach to adverse credit and support this with up-to-date, responsive service and consistent underwriting.”

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