Appearing on a panel at Mortgage Solutions’ The Buy to Let Event, Steve Cox, chief commercial officer at Fleet Mortgages, said times were tough, but business still needed to be done to support the rental market.
Emily Hollands, head of distribution at OSB Group, said smaller landlords may be less active, but larger, portfolio landlords would still make purchases, even if borrowing amounts or their purchase behaviour changed.
She added that from a lender’s perspective, there would be different products to suit these needs, potentially one-year fixes and high-fee, low-rate products, adding that even though some people did not like them, “there is a place for them in the market… because lenders have targets”.
BTL borrowers still need options
Cox agreed that there would be a resurgence of high-fee BTL products because the affordability structure would help some borrowers.
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He said it was not up to the industry to say whether these products were a good or bad thing, it was simply a “spectrum of choice”, along with zero-fee options that have a higher interest rate.
Cox said there were also “more trackers, with no ERCs”, adding: “By the time you add the stress rate on top of that quite punchy hurdle you need to get over on affordability, you’ll see a reasonable increase in business… yes it’s variable, yes, there’s risk attached to that, but if the customer is thinking in a year or two the climate will have settled down… you are hedging your bets.”
Hollands agreed, saying it was not about what was right or wrong, but “having the products out there in the market, that your landlords get a choice of products that they can choose from”, she said.
David Whittaker, CEO of Keystone Property Finance, said it was just as challenging for lenders to keep up with product changes and some sourcing systems could not manage thousands of adjustments, so lenders were choosing to take a few products off the shelves for a while and assess the environment.
Cox said: “We want to react quickly, both up and down, and the more products we’ve got, it’s just more stuff that needs to get to market… we’re very much in a period of shortened product sets.
“I’m not sure that matters too much, as long as there are products out there and choice out there in a volatile environment, that’s good for the customer and that’s good for you [brokers].”
