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Abbey for Intermediaries looking to enter B2L market

Abbey for Intermediaries is looking at entering the buy-to-let market in 2011 with products aimed at non-professional landlords.

The lender currently has no products in buy-to-let sector but with the market growing over the last year, it says it is a market it’s keen to support next year.

Speaking exclusively to Mortgage Strategy, Alan Mathewson, managing director at Abbey for Intermediaries, says: “What we’re looking at is the non-professional landlord, the type of landlord that maybe has one to three houses where they’ve not been able to sell their own property and ended up doing a buy-to-let, or the landlord that has inherited a house from their family.

“No decision has been made but that’s something we want to look at to support the market.”

The Council of Mortgage Lenders’ buy-to-let data for Q3 last week showed lending had increased by 12% from Q2, with 26,900 buy-to-let loans advanced in Q3 worth £2.8bn.

The quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending. Compared to Q3 in 2009, the volume of lending was up 14%

Michael Coogan, director general of the CML, says: “We would expect buy-to-let demand to pick up further if current rising rental trends continue and house prices remain broadly stable.

“But there is short-term uncertainty as a result of the unresolved debate on housing benefit and landlords’ response to new limits.”

At the height of the market in 2007 there were some 346,000 buy-to-let mortgages advanced with a value of £44.6bn.

When the credit crunch hit this figure reduced to 222,700 mortgages worth £27.2bn in 2008 and last year it shrunk again with 93,500 mortgages taken out worth just £8.5bn.

But some 73,800 buy-to-let mortgages worth £7.4bn were advanced in the first nine months of this year.

Capital Economics says that the recovery in the buy-to-let market in the last two quarters has run well ahead of the wider mortgage market.

It estimates that the share of new mortgage advances by value accounted for by the buy-to-let sector expanded from 7% at the start of the year to 7.5% by Q3. Santander’s view is that the market will continue to grow next year.

Mathewson adds: “People are more optimistic about buy-to-let in the second half of this year and then into next year maybe buy-to-let will be 10% to 15% of the market – that’s something that we want to look at.”

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JONATHAN CORNELL, HEAD OF COMMUNICATIONS, FIRST ACTION FINANCE

Marketwatch

Good luck to Which? for launching a broker service, but I fear it will have a tough job ahead of it. And it’s a shame estate agents are unhappy with brokers as a good relationship between the two can work wonders

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  • Roger Woodall 17th November 2010 at 2:07 pm

    I cannot understand why they are bringing out new products when they are incapable of servicing the products and applications they are currently receiving. This will only bring about more frustration to the advisers that have the missfortune to use them. Possibly another excuse for the BDM to hide behind rather than working.

  • GMS 16th November 2010 at 11:41 am

    Well done Abbey. Any new products are most welcome in this market. Unfortunately it does seem to be that whatever Abbey do there will be people ready to shoot them down. Yes Abbey have had their issues as we all know and they cointinue to frustrate on a daily basis. That said they have supported many a broker through the downturn and will seemingly continue to do so in the future.

  • Luke Atkinson 16th November 2010 at 10:00 am

    All positive but what we forget is that it won’t be long before the FSA regulate BTL and then they too will fall under the forthcoming and market crippling paper that is…MMR.

  • Dan McGeehan 16th November 2010 at 9:54 am

    Good on Abbey and this can only lead to more competition. Although they are not targetting landlords with more then 3 properties you can only hope that this forces BM and other established BTL providers to expand their criteria to maintain their market share.

  • Mike Fitzgerald 16th November 2010 at 9:00 am

    Any lender that brings out new products must be applauded.We need more products and choice and this small step by Abbey will help to create more competition in the mortgage market.and thats not a bad thing.
    Mike Fitzgerald
    The EMBA Group

  • Chris Pinkney 15th November 2010 at 5:55 pm

    How hypocritical can they get, what makes a non professional landlord a safer bet than a professional landlord? They were happy to advance me a residential mortgage a few years ago with my portfolio of B2L’s in the background but now because I have too many for their criteria I can’t port my residential mortgage with them! They are not supporting the market they are merely exploiting the market in a restricted way which of course they are perfectly entitled to do to ensure they get a share of it. Let’s be clear more product choice in this sector has to be applauded but if they do come in with B2L products don’t for one minute think they are being benevolent and supporting the market.

  • colin 15th November 2010 at 5:54 pm

    good news, but lets await the detail of pricing and criteria before breaking out the champers……the applicants probably need to show evidence of savings to cover 24yrs & 11months of mortgage payments!!!!!!!!! LOL…..

    I love it when lenders say they are keen to support a market….what AM really means is “we ve watched BM & TMW have it away for the last 12 months and fancy some of that ourselves” LOL

    slightly tongue in cheek but the last two years in this game have made many of us that way!!!!!