Charter Court boosted by BTL as bridging and second charge competition bites

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  • 23/08/2018
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Charter Court boosted by BTL as bridging and second charge competition bites
Charter Court Financial Services saw growth in its buy-to-let business and completed three securitisations worth £900m in the first half of the year.

 

However, in its first half results Charter Court, which is parent company of lender Precise Mortgages, said it also took a step back from the competitive bridging and second charge markets.

Overall the business reported a 63.1% increase in profit before tax to £93.1m during the first six months of 2018, compared to £59.3m in the same period last year.

During the first half of 2018 Charter Court said it saw a sustained shift in demand towards specialist buy-to-let products and as a result originations increased by 10.5% to £835.3m.

It also highlighted the importance of limited company and houses in multiple occupation (HMO) lending in the current market.

Buy-to-let mortgages represent 69% of Charter Court’s total loan book.

The lender also saw a strong six months in the residential market, with originations up slightly at £362.9m.

It noted that there had been strong demand for its help to buy and new build products.

 

Bridging and second charge

However, market competition in the bridging and second charge sectors saw the lender take a step back to maintain the quality of its book, with new originations falling in both sectors.

This was particularly prominent around the start of the year where many new entrants joined the bridging market.

“In the first two months of 2018 Charter Court chose not to react to competitive movements in its core bridging market,” the lender said.

“Activity remained acceptable and throughout this period the group maintained its focus on high quality, low risk bridging finance.”

Where second charge lending was concerned, it continued: “During the first half of 2018, Charter Court maintained its focus on high quality lending at appropriate margins, prioritising quality over volume of loans.”

Bridging new originations fell to £131.4m from £162m in the first six months of 2017, while second charge business dropped to £27.1m from £31m.

Each sector accounts for 3% of Charter Court’s total loan book.

 

Controlling risk

Charter Court CEO Ian Lonergan said: “We continued to make progress in the first half of 2018, delivering against or exceeding all of our targets.

“Steady growth in our balance sheet was maintained, with originations driven primarily by the strong uptake of our specialist buy-to-let products designed for the growing sophistication of our chosen market segments.

“This positive result was achieved while controlling risk efficiently and effectively, maintaining the high quality of our mortgage book,” he added.

 

 

 

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