A&L defends cautious B2L strategy

Alliance & Leicester has hit back at claims that its entry into the buy-to-let market is belated and shows a lack of commitment to the sector.

A&L revealed in early August that it plans to enter the sector next year after feedback from intermediaries suggested they do so, but has come under fire from HBOS for leaving it so long.

Michael Bolton, managing director of HBOS Specialist Lending, says: “I’m surprised a lender of Alliance & Leicester’s presence is only just noting the worth of the buy-to-let sector.

“Over the past five years, buy-to-let has had the best risk adjusted returns of any sector and you have to question the commitment of those just entering now.

“To me, A&L entering the market in 2006 is a case of shutting the stable door after the horse has bolted.”

But Alliance & Leicester says it feels the time will be right when it makes its entrance in 2006.

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, says: “We have seen the buy-to-let sector as something of a niche in the past but it has become more mainstream.

“This, coupled with the proposed extension of self invested personal pensions and the stable interest rate cycle, has created an ideal platform for us to enter the market.”

Yousefi says A&L intends to enter the market cautiously but with no shortage of enthusiasm.

He adds: “It is ridiculous to question our commitment to the sector before we have even entered it.

“Intermediaries will be able to decide for themselves once we begin lending in the buy-to-let market.”