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.”