Chris Norris, policy manager at the National Landlords Association (NLA)
Abbey for Intermediaries has announced it is to return to buy to let in 2011. It seems like a lifetime ago that Abbey exited the buy-to-let market, so much has happened in the interim. In reality, it has been less than three years since the Santander-owned brand cited “recent market moves” for its hasty withdrawal.
Abbey was certainly not alone in making a sharp exit from the market as the credit crunch took its toll.
In the same week that Abbey announced it was to concentrate entirely on its standard residential book, Bradford & Bingley imposed new terms and conditions on its landlord clients, GMAC shed hundreds of staff and the Woolwich withdrew its best products.
Those landlords without pockets deep enough to cope with decreasing LTVs and the upward trend in arrangement fees will be watching developments very closely. Not to mention the thousands of landlords currently tied to increasing SVRs without the previously assumed ability to switch products, who will be eagerly awaiting new products.
There is no doubt that the re-entry of any lender is to be welcomed, particularly when that lender comes with the support of the Santander Group.
There is a dearth of diversity in the buy-to-let market and frustration is growing amongst landlords anxious to take advantage of some of the lowest house prices in years.
Nevertheless, this is a limited return, seemingly focusing on only new and novice landlords. These new entries are certainly needed to ensure that the rented sector can cope with increasing demands. However, we shouldn’t forget that these individuals are those who need additional support, from lenders, partners and associations like the NLA.
Confidence is crucial to the mortgage market and the key question will be can Abbey’s renewed involvement inspire others to follow suit.
Also answering in this week’s Market Watch are:
David Whittaker, managing director of Mortgages for Business
