This week we’ve asked our panel of brokers to look back on the year and share their winners and losers of 2016.
Robin Purdie, director, MOV8 Financial, criticises the approach taken by some lenders to retention strategies, but praises previously direct-only lenders for their willingness to launch into the intermediary market.
Mark Harris, chief executive, SPF Private Clients, says smaller lenders have proved to be the most helpful to brokers this year, with product ranges aimed to meet the needs of under served borrowers.
Islay Robinson, CEO, Enness Private Clients, notes that despite unfavourable tax changes heaped on the Prime Central London and buy-to-let markets, business is booming at Enness with the expansion of two new offices, one based in Monaco.
2016, what a year. For me, the standout story of the year has been the all-out assault on the buy-to-let sector. We have seen buy-to-let purchase enquiries fall off a cliff, and let-to-buy has taken a hit as well due to the 3% surcharge. Factor in the changes to tax on rental income and the increased stress testing and its fair to say that this sector (and the main lenders within it) have been the big losers this year.
However, for every loser there must be a winner, and it has been a good year for first-time buyers, particularly in Scotland. Fewer buy-to-let purchases means more stock for first-time buyers, and with more lenders, better products and loosened criteria at higher LTVs, conditions are good for those looking to get on the ladder.
Brokers have also found themselves in 2016’s winner’s enclosure. Previous ‘direct only’ lenders have come to the party, and the number of lenders with a retention proposition has increased. This trend is rumoured to continue into 2017.
However, those lenders that seem almost proud of their ‘anti-retention’ stance (you know the ones…) continue to ruffle feathers. 2016 has seen a groundswell of contempt from brokers towards these lenders, so they definitely find themselves in 2016’s ‘loser’ column.
Lender-wise, several have had a great year. Notable mentions to Natwest, Barclays, Accord, Leeds and Virgin, all of whom have improved greatly during the year. However, some others have been in reverse unfortunately – Nationwide, I’m looking at you in particular, and I am hoping they can get back to their old selves soon.
However, all-in-all the good has outweighed the bad for us in Scotland this year, so here’s to a great 2017 as well!
2016 has been an interesting year for the industry with plenty of winners and quite a few losers. On the winning side, Natwest has really come to the fore this year as far its products, service and underwriting are concerned. Natwest has been a sleeping giant for far too long so this has been good to see. Barclays is also worthy of a mention for continuing to lead the way in the large loan market where we do a lot of our business.
However, it’s not only the big boys who have proved to be winners this year but a number of smaller building societies have also stood out. The Family Building Society (previously National Counties) deserves a special mention for designing creative solutions to help under served areas from first-time buyers to landlords.
One thing newer lenders are known for is a more creative approach and on the buy-to-let side, which has come under pressure with tax changes, stamp duty increases and criteria tightening – a couple of lenders have stood out. New Street has been using all the ‘big data’ available to create a buy-to-let offering tailored for real life circumstances while Axis Bank has also demonstrated a refreshing approach – a buy-to-let specialist aimed at the semi/professional landlord with a welcome can-do attitude.
As for losers, we nominate Santander and Nationwide for their retention strategy. And who can forget the damage the Treasury has done with its high-value stamp duty changes at the end of 2014, which has seen revenues actually fall? It continues to be a loser for not reforming stamp duty in 2016.
This year has been strong for both new entrants to the lending market and existing mortgage brokerages, so I would say they are the biggest winners of 2016.
It has been a great year for businesses bringing something new to the market. Of particular note are digital challenger Atom Bank, who has responded to the growing demand for digital lending by launching a range of mortgage products, and Axis Bank, which has expanded its lending criteria, enhancing brokerages’ ability to source finance for our clients, regardless of their circumstance.
Furthermore, and despite widespread reports of doom in the property market and many political talking points, brokerages like us are also ending the year on a high. Even though Prime Central London is largely regarded as one of the biggest losers – thanks to punitive stamp duty on first and now second homes – we have had a great year. Enness has grown from a team of 30 to almost 50, with a brand new client services team and two new offices, including one in Monaco. This is a reflection of the continued demand from people buying property, and growing demand from foreign national and expat clients.
There has been much talk in the press about the attack on the buy-to-let sector, which we of course agree with. Changes to stamp duty, reduced tax relief and now the ban on letting agent fees for tenants but not the landlord, have all contributed to the market becoming less attractive to enter. We should be encouraging this type of tenure, not discouraging it, and this year has acted as a deterrent.
Finally, and as has been widely reported, it has been an excellent year for borrowers. Record low interest rates have made it a great time to take out a loan but, for the same reason, it hasn’t been such a good year for savers.