The power hour
demand for renTed accommodaTion is clearly increasing – is ThaT going To drive more lenders To offer buy-To- leT? DF: I’ve been asked recently whether we’re thinking about lending in the buy-to-let arena again and the simple answer is that we’d love to. But right now, lending in that arena means not lending in another arena because there is a finite amount of funding. JM: From discussions we’ve had with lenders we see a little bit more money coming into the buy-to-let sector this year. But the issue I can see is, as David says, if more money is coming in we don’t want that to be at the expense of another part of the market. Mark Bullard: There’s limited funding out there and you have to make a choice about the commercial sectors you want to play in. I think we have to
balance that with bringing the right type of quality to our own back book as well. But it’s refreshing to see some positives in the buy-to-let sector with rising rents and as a lender you’re always thinking about what sectors to invest in. AY: I think there will be more lenders coming into this space and more funding available this year but from my experience to date, lenders are all after the same client. The amateur landlord is out of the market now and we’re left with more professionals. But if lenders are still looking at 60% to 70% loan to value and 130% rental cover there are only so many of those clients around. It then doesn’t matter if ten new lenders arrive on the scene, we have to look at the market and what demand is there. David Whittaker: It does seem that lenders are coming in and all trying to dance on the same pin head. Until lenders broaden what they’re prepared to offer the market won’t fizz and pick
up momentum. That Paragon and Precise are lending is a good thing because it’s influencing landlords’ confidence. And indeed competition and products have improved over the last year but I don’t think we’ll see a dramatic rise in the market in 2011. Robin Johnson: I think we should look at it from the other side too. Above 80% of the renters on our lettings books renewed their tenancies this year and these people are the first time buyers of the future. Their reasons for renewing aren’t because they don’t have a deposit or that they’re concerned about getting a mortgage. Actually, they’re more worried about government spending cuts and whether they’ll have a job in 12 months. In their minds they can walk away from a tenancy but not from a mortgage. There isn’t the appetite to get on the housing ladder within the UK as a whole – with the exception of resilient areas such as Greater London.
38 mortgage introducer FEBRUARY 2011
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