News Review: Buy-to-let
Buy-to-let is slowly getting off its knees
by Bob Young, managing director, CHL Mortgages
the latest cmL buy-to-let lending figures for quarter two this year show a still sub- dued market but one that ap- pears to be slowly getting up off its knees. the value of buy-to-let
lending was £2.4 billion, of which remortgaging made up £1 billion with the total number of loans at 24,900. remortgaging levels are un- surprising given most land- lords are either choosing, or having little choice, but to stay on their lender’s SVr. encouragingly both lend-
ing value and number of loans were the highest they have been since the last quarter of 2008, apart from the artificial situation of quarter four last
“Encouragingly both lending value and
number of loans were the highest they have been since 2008, apart from the artificial
situation of Q4 last year”
year which covered the end of the stamp duty holiday. it is also interesting to see that with 1.26 million buy-to-let mortgages outstanding worth £149 billion, the buy-to-let sector now accounts for 12% of all mortgages - the highest
A FRAUDULENT REACTION? One of the major buy-to-let stories which reached its conclusion recently was the case of former Met Police fraud detective, Charles Overend, jailed for five and a half years for committing fraud with the help of his brother and a solicitor’s clerk. Overend had pleaded guilty to six counts
of obtaining a money transfer by deception and possessing a false identity document. He had attempted the usual buy-to-let fraud trick of gaining a discount on the asking price of properties and then receiving loans from lenders for the original amount. Over-valuation of properties in order to perpetrate this type of fraud has gone on for years and it was pleasing to see one of those perpetrators being caught. Which is why I was rather surprised to come
across a number of advisory comments on some news websites that seemed to suggest that Overend had been hard done by and that the police would have been better off catching
8 mortgage introducer SEPTEMBER 2010
proportion since the cmL be- gan releasing figures. one suspects that the im-
pact of the new buy-to-let lenders will not have filtered through into these figures as yet and all those within the sector will be waiting for quar- ter three’s figures to see what impact they have or haven’t had. i would predict a fur- ther small increase again but landlords will still be dealing with a constrained lending environment for the foresee- able future. these figures do however
reveal the continued, perhaps even growing, importance of the buy-to-let sector to the uK’s housing market. the private rental sector is being relied upon by the govern- ment to meet the consider- able needs of the uK housing market, particularly at a time when home ownership is a pipe dream for many people and the numbers of social
‘real criminals’ than focusing on this sort of crime.
It really beggars belief that there are some
individuals working within the advisory sector who would be willing to turn a blind eye to mortgage fraud when we know only too well that eventually it will be their client who ends up paying in the form of higher mortgage costs, fees, etc. It is worth repeating that fraud affects everyone
in the industry regardless of their position. We talk all too often about the importance of market confidence so how would this be affected if we appeared to be a sector which did not pursue fraudsters? The comments I read may have been flippant however to say that we should ignore fraud is truly startling, particularly as every piece of fraud perpetrated will have an impact on the level of ongoing mortgage funding available. Stopping fraudulent activity should always be a priority and we should all be pleased to see justice done in this case as it should hopefully dissuade others from attempting the same.
housing and house building is dwindling. if the buy-to-let sector is to
meet these challenging de- mands then perhaps we need to look again at helping the specialist lenders come back to market to help meet the landlord demand that clearly exists?
CHL SURVEY Our own half-yearly landlord survey highlighted a slight increase in uncertainty felt by many landlords particularly around their ability to expand their buy-to-let portfolios. The vast majority (64%) are still positive about the future of buy-to-let however there was a significant increase – from 9% to 25% - in those who are unsure. The fact remains that, while many landlords would welcome the chance to expand their portfolios particularly when there are opportunities available, they are currently faced with lending and funding issues which make it difficult to translate ambition into actual purchases. Existing lenders are,
quite rightly, still cautious when it comes to buy-to-let lending and while we have seen some movement in terms of increased LTVs, we should not expect them to go beyond 80% levels. While we acknowledge the frustrations of some landlords in being unable to purchase property, particularly at a time when rental demand is growing, the lending community has to stick to its responsible lending guns.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52