News Review: Buy-to-let
Lender appetite for BTL surges in New Year By Yuan Phoon
Lenders have dived into the buy-to-let sector with gusto at the turn of the year with the loosening of criteria and the launch of new buy-to-let ranges. Abbey for Intermediar-
ies’ long awaited launch into buy-to-let finally came to frui- tion with its opening range unveiled in mid-December. Regarded as a cautious entry, AfI became more competitive in the space in mid-January, cutting rates by 0.20% and launching a raft of tracker deals. Paragon too made a big splash at the start of the year with the launch of 50 prod- ucts. The main attraction to the range was the changes in criteria. Paragon’s previ- ous calculation of 130% rental income cover at an interest- only rate of 7% was cut down to 125% at 5%. Ying Tan, managing direc-
tor of The Buy-to-Let Busi- ness, said the reduction would mean more cases would go through which didn’t fit last year, particularly cases involv- ing limited companies and larger portfolios for profes- sional landlords. Tan said: “Those areas were
very difficult to get financing for and the financing that was available was very difficult to fit with the rental cover re- quirements.” Lea Karasavvas, managing director at Prolific Mortgage Finance,
said: “The launch
of the range from Paragon is a welcome announcement from them and one that I think will make other lenders stand up and take notice.” Buy-to-let does however
have a seasonal lull at the be- ginning of the year said Sally Laker, managing director of Mortgage Intelligence. Laker said that speak- ing generally from previous years, the pricing in the first couple of weeks in January was always quite tentative but would evolve in later weeks. She said: “Everyone is still
waiting for 2012 to kick-off in buy-to-let. We’re still in that period where everyone has just got back from Christmas and the pricing has yet to ma- ture. “It’s evident that lenders
want to lend in buy-to-let. It’s business which lenders are drawn towards.”
Mid January boost Indeed in mid-January AFI became more competitive on rate and Yorkshire build- ing society, under its Accord Mortgages brand, opened its buy-to-let offering to the rest of England and Wales and loosened its criteria. Jeremy Law, head of buy- to-let at Yorkshire building society, stated the mutual’s in- tentions with its recent move: “We want to be a major player in buy-to-let and we want to let brokers know we’re here to stay. We’re not going to bounce in with a tranche of funding and bounce back out. Buy-to-let is now a material part of the mortgage market and so as a lender we want that to be a part of us as well.”
BTL and brokers Barclays Woolwich also made further strides in buy-to-let with the re-launch of its 75% loan to value products with tiered fees dependent on loan size.
18 MorTgage InTroDucer FEBRUARY 2012 David Finlay, intermediary
channel director at Barclays, said: “The demand from brokers is really strong to provide competitively priced buy-to-let mortgages at 75% loan to value as investors seek to remortgage or continue to purchase properties for tenants. “As one of the UK’s largest lenders we recognise the im- portance of supporting this market, with factors such as tenant demand expected to increase even further this year and people in the UK gener- ally renting for longer, this is helping to provide increased security for landlords.”
“What we’re now seeing is a sensible start in 2012 with several lenders stepping up to 80% LTV. It takes the pressure off BM Solutions and TMW who have been running a controlling share of the market”
Loan to value Data from Mortgages for Business’s buy-to-let mort- gage sourcing tool also showed that The Mortgage Works, Kent Reliance, Saffron, Leeds,
the Aldermore and Clydesdale all offer buy-
to-let mortgages with LTVs up to 80%. David Whittaker, manag-
ing director at Mortgages for Business, said: “We haven’t yet got back up to the peak in October where there were 500-odd products;
we’re
around 50 shy of that now. What we’re now seeing is a sensible start in 2012 with several lenders stepping up to 80% LTV. “It takes the pressure off
BM Solutions and TMW who have been running a con- trolling share of the market. They have about 70-75% of the buy-to-let market share and I reckon they’re quite re- lieved that other lenders have stepped into the space to re- lieve the pressure on them.” With the increased number of lenders entering buy-to- let, competition on pricing is likely to increase and Whit- taker agrees. “Although overall pricing in the market may go up be- cause of events elsewhere, the buy-to-let sector may see pricing go the opposite way due to lenders jockeying for position so we should see pricing go down even fur- ther,” he says.
“What the market could
benefit more from now is some serious positioning for the light refurbishment product. TMW had one but it seemed too light. Unless someone pushes more into that space,
it’s likely they
won’t change it.” Research from the Associa- tion of Residential Lettings Agents suggested that despite the increase in competition, it had expected landlords to re- duce the growth rate of their portfolios this year.
www.mortgageintroducer.com
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