It is early days but the big players seem to be holding back from launching into the new-style limited company buy-to-let
It is fair to say the mortgage industry is never boring. Whether it is regulatory or government policy changes, world affairs or market conditions, many factors have an impact on it.
Managing these changes is time consuming and costly, making the process generally more complicated for the consumer rather than simpler.
The changes to the buy-let market seen last year have led to predictions of its size dwindling. Lenders no doubt have been calculating the effect it will have on their total volumes for 2017. Having reached a certain level of complication, it seems buy-to-let lending could be heading back to the specialist lending category.
Specialist lenders have been at the forefront of technology and the use of systems that enable them to take on limited company business. The question is very much around whether the high-street lenders will do the same.
Buy-to-let became popular from 1998 and limited company was the main product offering from lenders. But those days have long since gone, along with the systems and the expertise. It would be a costly exercise to bring that all back and today’s version is very different from the previous model anyway.
It is also still too early to assess the demand. If it is manageable by the specialist lenders, those on the high street may choose to look for volume elsewhere. It also makes the intermediary role more important because, the more complicated it gets, the more their specialist knowledge is needed.
If the big players see a real dip in their volumes, that may prompt a different approach. But right now they seem to be holding back from launching into the new-style limited company buy-to-let.
Sally Laker is managing director of Mortgage Intelligence