Review: Buy-to-let
Growth in buy-to-let shows no sign of abating by
David Finlay, intermediary managing director, Barclays
If the buy-to-let market was the star of a reality show, a premiership footballer or
a
‘teen heartthrob’ then it would almost certainly have been trending constantly on twitter such is the exposure generated in recent weeks. And, rather than being
caught up in any salacious late night fracases or being exposed with a love child, it has been a juggernaut of posi- tive news with business being placed with even greater fre- quency than phone calls from a football agent on transfer deadline day. In short the market is in
rude health. Demand remains high
amongst tenants, more prod- ucts are becoming available and as a result many landlords are making the most of some advantageous conditions to refinance investments and tap into some high yields.
Strength in numbers All of which is being reflected by some strong statistics. Re- cent data published by the Council of Mortgage Lenders showed that buy-to-let lending in Q2 saw the market reach its highest level since Q3 2008 in both the number and value of loans being advanced. Lenders were said to have
advanced 40,000 mortgages worth £5.1bn in the second quarter of 2013, 19% higher by volume and 21% higher by value than the preceding three months and 19% and 31% re-
spectively, year on year. By the end of June buy-to-let mort- gages were said to account for 13.3% of outstanding lending in the UK. Commenting on these sta-
tistics, Jackie Bennett, head of policy at the CML, said: “Strong rental demand is con- tributing to the continued expansion of the buy-to-let sector but growth is also be- ing helped by improved condi- tions in funding markets and more widespread availability of mortgages.” And it’s hard to disagree. It’s
clear on the back of the first anniversary of
the Funding
for Lending scheme that this, duly supported by Help to Buy and sustained low interest rate levels, have certainly provided a shot in the arm for the hous- ing and mortgage markets.
Healthy appetite Housing experts continue to predict that appetite for buy- to-let mortgages will grow on the back of the recent pledge by new Bank of England gov- ernor Mark Carney to keep interest rates low until unem- ployment falls below 7%. With the Bank of England
Monetary Policy Committee also currently predicting that a sufficient fall is unlikely to take place until mid-2016, it appears that more and more savers will continue to turn to property investment in order to get a decent return. Looking at the present and
it’s fair to say that July and Au- gust have seen strong lending levels in both the residential and buy-to-let sectors with the vast majority of brokers up and down the country busier than they were 12 months ago. Inevitably, this has also led to
10 MORTGAGE INTRODUCER SEPTEMBER 2013
confidence levels continuing to grow. Indeed, a recent survey of
mortgage and secured loan brokers carried out by the Blemain Group has revealed a growing confidence in the in- termediary market with 84% of respondents saying they had seen an increase in busi- ness in the first half of the year. And that this trend looks set to continue with 81% of re- spondents reporting they were confident their business would grow during the remainder of 2013. Another interesting point to note was, of those surveyed, 62% highlighted the buy-to-let market as the top performing area. First-charge mortgages was said to have at- tracted 52% of the vote while 42% cited the secured loans market as the best performer. Tis compared to 45%, 40% and 39% for the end of 2012.
Terms and rates TBMC’s Landlord Profile Tracking Index for Q2 2013 found that the average rate for mortgage offers dropped by 0.33%. It showed that Q2 experienced increased com- petition between lenders and a selection of sub-3.00% prod- ucts. Te average fixed rate for offers processed by TBMC in Q2 2013 was said to be 4.15% and the average variable rate 4.35%. Representing a drop of 0.33% for both product types. It’s great to see the buy-to- let market heralded as such a
top performer with product rates falling and such a posi- tive outlook surrounding it. But, as ever, it’s up to lenders and other support services to ensure that
this momentum
is maintained, especially for those operating in the inter- mediary market. Tankfully, the nature of the market con- tinues to see it evolve its offer- ings. One of the many support service providers, Mortgage Brain, has recently extended its buy-to-let capability with the inclusion of a host of new sourcing filters. In addition to the option to source prod- ucts based on expected rental income and the number of existing properties, new filters now include options to lend to a limited company and select AST over 12 months or house in multiple occupancy. Ad- ditionally, a number of search specific ‘let type’ filters are now available, including holi- day let, DSS, local authority, housing association, students, company let and sitting tenant. Te right type of help and
extra support for intermediar- ies should always be welcomed especially in more specialised areas. And we should also welcome new entrants such as commercial buy-to-let lender Shawbrook Bank who has just announced its entry into the mainstream buy-to-let arena via two products through se- lected
broker partners. It’s
clear that many lenders con- tinue to eye the market with great interest and as such it will be no surprise to see other providers and support services taking advantage of strong market
conditions to help
propel the buy-to-let arena to even greater heights in the fi- nal quarter of 2013.
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