Actions on limited company mortgages show the innovation in this sector and the ability to react quickly to demand
Remember the days when buy-to-let ‘news’ meant product updates and criteria changes? Back in the halcyon days of the pre-election world – before Mr Osborne and his friends formed a majority government – this column was dominated by new lenders and exciting product launches. Since May 2015 – or, specifically, last July’s emergency Budget – a lot has changed.
Indeed, you could be forgiven for thinking the market had gone quiet from a product development perspective. Headlines are dominated by government intervention, lamenting further blows to the sector. The Prudential Regulation
Authority is the latest to grab column inches with news it wants to introduce standards to make buy-to-let lenders more prudent.
As a commentator, I cannot talk about the sector without mentioning these things. We are asked to give our opinion on market developments and the PRA announcement is no exception.
For the record, I believe prudence is not necessarily a bad thing. This is a market that, thanks in no small part to the aforementioned interventions, is constantly changing. The goalposts are moving on an almost monthly basis and measures to ensure the borrower can cope in such a market are a good idea.
As long as common sense is applied and this does not lead to further unnecessary regulation, I do not think it is that bad.
Emphasise the positive
But while we cannot avoid commenting on the regulation, legislation and intervention, I would like us to not ignore the positive developments taking place.
A case in point is what lenders are doing with limited company mortgages. Yes, this is reactionary to what is happening in the wider market but it is demonstrative of the innovation in this sector and the ability of lenders to react quickly to market demand.
Paragon is the latest to enhance its criteria on limited company mortgages, removing its exclusivity restriction that prevented limited company landlords from dealing with other lenders.
There has also been downward movement in rates from Accord, Barclays and Virgin. They have all enhanced their product ranges because they feel the market is in good shape and demand exists.
Continuing threats of regulation and government strategies are too big and important to ignore but the smaller developments taking place in the market should not be ignored. Let us get back to talking about what really matters:
Ying Tan is managing director of the Buy to Let Club