the power hour
ratio probably looks worse on new build whereas the bad debt on commercial deals looks different so it’s about making banks look at things differently. So there are big political challenges in the industry moving forward. AY: The hub of this is a lack of funding. We don’t know when there will be an increase in foreign investment into the residential housing market. IP: Part of the problem is the tax efficient vehicle for it. The cabinet office is examining whether the tax efficiency of it can be improved for the institutional investor.
Andrew Montlake: I agree with Nigel on that. Our clients want higher LTVs. Mark Long: Anecdotal research which we’ve done recently suggests that we’re seeing a new type of investor who is seeing lower returns on traditional forms of investment looking to shift funds across. Taking a broader look at the private rental sector I know that one in four investors is unencumbered. Robert Sinclair: The political elements around new build are very complicated. A part of the Liberal Democrats saying that there’s £100m in new build is a defence that they want to be able to say they’ve done something but the problem is there is no money to do anything. The other part is the political philosophy coming out of government at the moment which is not wanting to interfere in markets. The fundamental Conservative philosophy is that the market should sort itself out. In the past when government intervened, they’ve screwed it up badly. The problem is that they’ve already intervened in the market supporting certain companies and forced banks to do a lot of work around repossessions.
Politically it’s about to change because people are getting gazumped on rentals for the first time. And there are people who have genuinely believe they can afford because they’ve been paying the rent for the last two years can afford a mortgage for less than the amount they’re paying in rent but aren’t being allowed to because of the lending criteria. The industry’s challenge is to look at what do we want to move on from this point?
The struggle we’ve all got is that lenders have scarce capital, there isn’t a simple solution to all of this and nobody’s got any money to spend. Buy-to-let however has got to be the answer to the problem because ultimately, individuals coming out of school and university are going to have a massive amount of debt and aren’t going to want to buy. We’re going to have 10 years of pain as we socially reconstruct what we’ve got. The challenge is how we’re going to be able to fund buy-to-let whether it be through the commercial lines or through retail type of investment. It’s this gap of when we’re running through a mortgage book, the bad debt
What is investor demand like? NS: If you can get the right property on the market then you’ll see more demand for it. AM: We’re starting to see the phones ring more from old investors wanting to get back into the market definitely. We’re also starting to see a lot more people who are fed up with the equity markets, worried about pensions and an older breed of people who now want to invest in buy-to-let as well so demand is growing. ML: We talked to 700 landlords a couple of months ago and one in five said they wanted to add at least one further property in the next 12 months. IP: We see that as well. ML: It is worth saying that, that activity is seen on the upper end as well in the 12 to 20 plus properties.
so more on the commercial side rather than the retail? ML: I don’t know whether commercial would be the solution for these guys but certainly it’s the portfolio guys who are going to be more active to this sector. AY: It’s true to say that the more properties a landlord is running the more difficult it
Follow us on Twitter @mortgagechat 40 mortgage introducer OCTOBER 2011
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 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60