Landlords who support the market are being snubbed

I was shocked to hear that Cheltenham & Gloucester is changing its buy-to-let criteria to what amounts to punitive levels.

Clients with more than three investment properties or total mortgages of more than 500,000 across Lloyds Banking Group will be denied access to C&G funding.

And if the bosses at Lloyds have decided it doesn’t want C&G to play in buy-to-let, you can bet the Birmingham Midshires brand won’t be far behind.

This all seems rather strange coming from a lender that has consistently touted for the business of professional buy-to-let investors, and has been good at offering competitive rates and quality service until now.

This development also makes me worry about buy-to-let generally, as lenders seem to be beating a hasty retreat and putting the private rental sector on a par with sub-prime.

While it’s true that a lot of lenders have got messed up in dodgy buy-to-let lending, this has nothing to do with investors who are in for the long-term – portfolio landlords with enough cash, properties and business sense to take buy-to-let seriously.

It is these investors who have the wherewithal and, more importantly, the deposits to bring a bit of life back into the housing market.

It’s no secret that would-be home buyers are turning to rental properties instead, nor is it confidential that local authorities do not have the stock to meet the growing need for social housing.

Professional landlords have been filling this gap and effectively propping up the rental market and in turn the housing market.

In return, they have been rewarded by lenders turning their backs on them by withdrawing from the sector or, as C&G has done, making it difficult for them to access funding.

Lenders should start looking at professional buy-to-let cases on their merits as opposed to bringing a halt to investment as a knee-jerk reaction to risk.

James Marshall

Clarity Financial Services

By email