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B2L could rival FTB sector

HBOS predicts that the buy-to-let market will be as big as the first-time buyer sector by 2011.

Speaking at Mortgage Strategy’s Mortgage Packager Summit in Nice, France, last week, Phil Jenks, head of mortgage strategy at HBOS, told delegates that an increase in immigration from Eastern Europe by 100,000 people per year will mean the buy-to-let market will go from strength to strength.

He says: “We have looked at the statistics and buy-to-let seems a sure thing. The specialist sector will grow to cover as much as 30% of the market by 2011. This is why I believe packagers will survive. The economics say they will be able to keep going as the specialist sector grows.”

One industry source says that with buy-to-let representing 12% to 13% of total lending in 2006, the two markets are probably close in lending size already.

Lee Grandin, managing director of Landlord Mortgages, says: “I can see a move towards lending more to landlords than to first-time buyers because the risk is potentially lower.

“A landlord can oust a tenant if they don’t pay the rent but if a first-time buyer gets into financial difficulties a lender has to get a repossession order.”

John Heron, director of mortgage at Paragon, says: “There is no question that we’re in the middle of a fundamental shift in housing patterns. For all the reasonsJenks mentions and more, we have seen progressive growth in the private rented sector over the past 20 years.”

Gus Park, head of buy-to-let mortgages at Mortgage Express, says: “It may be that there is as much potential lending in the buy-to-let market as there is in the first-time buyer sector. But that does not mean there will be as many purchases by buy-to-let investors as by first-time buyers because the buy-to-let market includes remortgages.

“A race between buy-to-let and first-time buyers is unlikely. There is no reason why the two markets can’t flourish at the same time.”

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