Brokers baffled by FSA report on B2L arrears
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Brokers have questioned data produced by the Financial Services Authority that suggests big lenders used to offer buy-to-let deals at more than 90% LTV.
The regulator published a table breaking down arrears rates accor-ding to LTV and product type last week as part of its Financial Risk Outlook report.
The table, first included in the FSA’s Mortgage Market Review last October, is based on data from the 10 biggest mortgage lenders and shows LTV at origination in 2008.
It gives an 8.13% default rate for buy-to-let mortgages with LTVs between 90% and 95%, a 6.33% default rate for buy-to-let loans between 95%LTV and 100% LTV and a 3.4% default rate for buy-to-let loans with LTVs in excess of 100%.
But brokers commenting on Mortgage Strategy Online have questioned whether buy-to-let deals at more than 90% LTV were ever available.
Geoff Laird, principal of Buy to Let Funding Services, says: “85% was the usual LTV for buy-to-let deals. Some went up to 90% LTV and occasionally went higher, but these were niche facilities.”
And Bob Young, managing director of CHL Mortgages, says: “These figures are totally out of line with our experience. We have no knowledge of any top 10 lender ever offering mortgages at 95% LTV for buy-to-let.”
An FSA spokeswoman could not reveal which lenders offered high LTV deals as data was supplied on condition of anonymity.
Readers' comments (3)
Evan Owen | 15 Mar 2010 5:49 pm
Facts are stubborn, but statistics are more pliable.
Mark Twain
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Anonymous | 18 Mar 2010 1:50 pm
the only reason I can think of why this is the case, is that lenders have assertained the 'real' value of what is on their books.
Many BTL valuations were very suspect, especially in New Build with 'gifted deposits', property clubs etc
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Anonymous | 18 Mar 2010 3:30 pm
I can see the next set of stats now....
99% of brokers think FSA are doing a great job.
An FSA spokeswoman could not reveal which brokers as data was supplied on condition of anonymity.
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