Lending figures published by UK Finance show how resilient the buy-to-let sector is.
In 2018, lending totalled £36.8bn compared with £35.6bn in 2017. So much for my January 2018 prediction of a fall in BTL lending. We have also seen a spike in remortgages following the two-year anniversary of the stamp duty land tax surcharge and we may see more of the same this year as landlords come out of three-year products taken out in the run-up to April 2016.
The lending figure for January this year – £3.28bn including product transfers – was up month on month and only down very slightly compared with January 2018. These results hardly indicate pending doom – but neither do they sell newspapers.
Which brings me to a disappointing article issued by one of the nationals recently, which referenced four lenders that have recently halted lending. The article quoted a source that intimated that these lenders had ceased trading because their investors were taking fright in an uncertain market, that the securitisation markets were closing and that the potential of another credit crunch was looming. The author did not check the facts.
Secure Trust Bank decided to halt low-margin mainstream residential lending as it could not compete with the large mainstream lenders. Instead it decided to stick to what it is good at in the commercial and development finance arena.
It is a similar story for Magellan, although it did not have other business lines to fall back on. Fleet Mortgages, on the other hand, was a victim of its own success, having exceeded its funder’s appetite to lend. I expect it to return to the market next month.
The demise of Amicus Commercial was not down to the securitisation market but more to do with other lending activities within the wider Amicus group.
As usual, we are in danger of talking ourselves into another recession and articles like that do not help. There is also a perception that the ‘B’ word is causing unrest in the market. Our polls show that for 55 per cent of respondents, Brexit is not affecting investment plans, while just under a quarter said that they were holding fire – hardly a dire situation.
Steve Olejnik is managing director at Mortgages for Business
|Best Buys: Buy-to-Let Mortgage Rates|
|Lender||Term and rate||APR||LTV||Fee||ERCs||RTI|
|Keystone Property Finance||
3.75% 5-Year Fixed
Reverting to lender’s LIBOR + 4.90% (currently 0.91%, variable).Purchase-only product for SPV & trading Ltd companies.
|5.4%||75%||2%||Yes||125% @ 3.75%|
|RBS – Natwest||
2.62% 5-Year Fixed
Reverting to lender’s SVR (currently 4.74% variable)
Remortgage-only product for individual applicants.
|4.2%||70%||£995||Yes||135% @ 5.50%|
|The Mortgage Works||
1.49% 2-Year Discount
Reverting to lender’s SVR (currently 4.49% variable)Purchase, remortgage & further advance product for individual applicants.
|4.3%||65%||£1,995||Yes||145% @ 5.50%|
2.79% 2-Year Fixed
Reverting to lender’s LIBOR + 5.08% (currently 0.85%, variable).Purchase & remortgage product for SPV Ltd companies.
|5.7%||75%||£995||Yes||145% @ 5.99%|
2.89% 2-Year Fixed
Reverting to lender’s SVR (currently 4.49% variable)
Remortgage-only product for product for SPV Ltd companies.
|4.4%||65%||0.5%||Yes||125% @ 5.50%|