Is it just me or has 2015 been one of the fastest years in history? It seems no time at all since we were making predictions for what this year may hold and now here we are looking back at what has been an interesting, albeit challenging, year and planning ahead for another huge year of regulatory change in 2016.
As the market settles down to mince pies and sherry and enjoys a brief bit of breathing space amid the festivities, I thought it would be a perfect time to shine the spotlight on 2015. As I’m sure I don’t have to tell anyone involved in buy to let, it’s been a bumpy ride!
The year began with some interesting criteria changes. Nationwide subsidiary The Mortgage Works launched the only 10-year buy-to-let fixed rate deal in the market at an excellent rate of 4.99%.
Keystone made a huge change to its buy-to-let offering by announcing it would accept applications from first-time landlords. And Woolwich took steps toward addressing a big ask from many landlords when it announced it would allow personal income to be accepted when assessing buy-to-let affordability. The lender said it would accept any shortfall in rental income used to calculate affordability to be met by the applicant’s disposable income.
There was also a new arrival in the market as buy-to-let stalwart Bob Young returned to the sector with brand new lender Fleet Mortgages. The lender began accepting business through a limited distribution channel (including the Buy to Let Club) while announcing plans to open up to the wide broker market later in the year.
No sooner had we welcomed Fleet Mortgages into the sector, we had another new arrival with Foundation Home Loans launching early in the month. The lender entered the market with two ranges for light adverse and prime borrowers.
The biggest criteria change this month came courtesy of InterBay. The lender caused a huge stir in the market by announcing it would now finance buy-to-let properties that are owned (or to be owned) by trading companies.
Given the developments that were to come later in the year in terms of landlords owning properties via limited companies one could say Interbay showed excellent foresight here!
This sector is still incredibly niche but we may well see that change in 2016.
As we approached spring, the stand out lender for me was Santander. Indeed, after going to great lengths to cement its place in the buy-to-let market, in March it took the final step toward becoming a major player within the sector by announcing it would now allow remortgaging with capital raising for personal use.
The policy change meant the lender would allow remortgaging with capital raising for personal use up to 75% including property/home improvements, personal use/debt consolidation and investment including purchase of another buy-to-let or residential property.
By April the country was caught up in the frenzy of the General Election as the most closely fought battle in years neared its conclusion. And while the buy-to-let market was braced for big change, that didn’t stop it from continuing its quest to be the most innovative and exciting sector in financial services. Indeed, amid the election countdown, Axis Bank UK announced its plans to launch into the buy-to-let market before the month was out. The lender is already one of the biggest lenders in India and its arrival into the market was extremely exciting.
Elsewhere new lender Foundation Homes Loans continued to make its mark on the sector by announcing it would accept CCJs and defaults provided they are up to date at the time of application. The new lender also said it would accept applications from borrowers who do not own their own home as long as they have held at least one other buy-to-let property for at least 24 months.
The headlines in May were dominated by one thing only – the General Election. In the run up to 7 May there was concern among the landlord community that if Labour were to be victorious it could mean the buy-to-let market suffered. Labour leader Ed Miliband had made it clear he was going to target the sector with rent caps among his manifesto suggestions. It was of course the Conservative Party that stormed to victory leading many property investors to breathe a sigh of relief. Little did they know that relief would lead to despair in just a few weeks’ time.
In June, Nationwide was grabbing the headlines once again after announcing that clients who were remortgaging their current residential property as a buy to let with TMW could now apply for their onward residential mortgage with Nationwide, as long as they used a broker. As part of the new joint proposition, Nationwide wass also giving clients £250 cashback when they completed their onward Nationwide residential mortgage, in addition to a free valuation which comes as standard on all TMW let to buy products.
And Foundation Home Loans continued to shake things up by declaring it would now accept applications from first time landlords. This has always been a very under developed sector so it was fantastic to see the new kid on the block take such a bold step.