Is buy-to-let criteria becoming dangerously relaxed?
I think criteria remains at prudent levels and I cannot see a return to the pre-credit crunch days when they were too relaxed. But one area of concern is where lenders are basing interest coverage ratios the ability of borrowers to pay the interest on loans on artificially low product rates. There are some attractive rates available at the moment and if the interest coverage ratio is based on this alone, I would question what could happen to the mortgage’s affordability when the introductory rate ends.
How large can the private rented sector become?
We are undergoing a major transition in housing tenures, with a long-term decline in owner-occupation and social housing and growth in privately renting. Around 16% of households currently live in the private rented sector and that can only increase during the coming years as the population grows, particularly those segments that traditionally use rented accommodation such as single person households and economic migrants.
The UK’s private rented sector is still immature compared with some of our European counterparts, particularly Germany, so there is still scope for growth.
With a rush of new lender entrants, how competitive are rates becoming?
There is pressure on rates, particularly at the amateur end of the market, which is mirroring what is happening in the owner-occupied mortgage sector. But the rate is not always the primary driver for landlords, particularly professional landlords who may have complex needs. In these cases, criteria and whether the lender has the experience and skills to cater for the proposition are more important.
If you were in charge of the Financial Services Authority for a day what would you do?
I’d look at the next set of Mortgage Market Review proposals to see whether they balance consumer protection with choice. I fear they favour the former.
What is your most extravagant ever purchase?
Probably an Italian dress from one of those small but expensive clothes shops in the old part of Brighton known as the Lanes. It was for my wife I hasten to add, and I’m waiting for her to wear it again.
Who is your biggest hero and why?
It would have to be between guitar hero Eric Clapton and comedy hero Ronnie Barker.
What book are you reading?
The Fully Authorised History of I’m Sorry I Haven’t A Clue by Jem Roberts. It’s guaranteed to make you grin.
Interview by Samuel Dale