News Review: Buy-to-let
Buy-to-let strong but criteria remains strict By Yuan Phoon
The number of properties being bought with buy-to- let mortgages increased by around 84,000 in 2011, fig- ures from the Council of Mortgage Lenders reveal. The latest figures from
Paragon Group showed that a fifth of landlords expected to expand their portfolios further in 2012. Nigel Terrington, chief ex-
ecutive of Paragon Group, said: “Landlords expect 2012 to be a steady, stable year with continuing opportuni- ties to achieve healthy yields and make further property purchases.” Research by Mortgages for Business supported these
findings however it also re- vealed that one in five prop- erty investors felt that lend- ers were not doing enough to support investors and that lenders should reduce their fees consequently. David Whittaker, manag- ing director of Mortgages for Business, said:
“Classically
lenders will just bump into the market and offer a va- nilla mortgage product. It’s intellectually and commer- cially lazy.
“The market for HMOs
and large portfolio landlords is huge and they are being under serviced.
Lenders
should cater for the market that is there and not the one they perceive is there.” Some lenders have an-
News Review: Short Term Finance Bridging market on track to smarten up
by Paul Brett business
development director, borro
er to market a real interactive ‘app’ for their products. I am sure they will not be the last this year to seize the advan- tages that technology has to offer as a medium to interact more closely with intermedi- aries and their clients.
2012 is not yet out of first gear and the bridging market is already generating more headlines than ever. From the innovative and informa- tive to the argumentative and fractious, it is good to see the pot bubbling away so early in the year and showing that the market is really alive and kicking.
New technology Congratulations to Tiuta on being the first bridging lend-
Sourcing tools Another example of innova- tion is the imminent arrival of sourcing engines for brokers wanting to compare bridg- ing deals. Y3S Group, among others, has attracted a lot of advance attention with this add on to its existing module for secured loans and it will no doubt help many inter- mediaries who might have been wary of involving them-
18 MORTGAGE INTRODUCER MARCH 2012
selves in an area with which they were unfamiliar.
Interest calculations With other parties working on their own bridging sourc- ing modules,
it probably
has not come a moment too soon as Precise Mortgages has been demonstrating that their method of interest cal- culation differs from their competitors and implying that clients will save money using their service. Sourc- ing systems tend to rely on uniformity of calculation so it will be interesting to see if they will be able to accurately display the cost differences. Whether or not this is just a marketing stance as some
pundits have suggested, Pre- cise are to be congratulated for shining a light on the whole subject of how cli- ents are charged. If it makes some of the less scrupulous operators adapt their imagi- native charging structures to the benefit of the client, then Precise’s move will have been a good thing for the in- dustry as a whole. We can be sure that the regulator and the Office of Fair Trading will be tak- ing a particular interest in how this story develops. We all bang on about transpar- ency and the need for higher standards and I am sure that most players will welcome the scrutiny.
www.mortgageintroducer.com
nounced they are going to step up to the increasing de- mand. In February BM Solu- tions cut rates on a handful of products by up to 0.30% and then a couple of weeks later made cuts across its en- tire range by 0.20%. Phil Rickards, head of sales at BM Solutions, said: “We are deliberately trying to shake up pricing in the market and I hope our mes- sage is clear - we’re here to lend. “As long as we continue to see such strong levels of ten- ant demand, this is a solid market. It’s great to see some new lenders and as you can see from our latest pricing moves, we really welcome the competition.”
Andy Young, chief execu-
tive at TBMC, said that de- spite expansion in the mar- ketplace further product innovation was needed to meet the needs of property investors. He said: “In particular there are currently limited options for professional landlords looking to expand their portfolios and just a few lenders have substantial lending aggregates.
“2012 should see fur- ther improvements in the buy-to-let mortgage market however given the existing problems in the eurozone it may take considerably lon- ger for the supply of finance to catch up with the demand.”
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