Complex Buy To Let
TSLE2020: Lower ICR products needed to serve pent up purchase demand
Lenders who are not regulated by the Prudential Regulation Authority should consider launching products with lower interest cover ratios (ICR) to accommodate purchases, a specialist lender has said.
Speaking at The Specialist Lending Event in Birmingham, Jonathan Samuels (pictured), founder and CEO of Octane Capital, said purchases needed “high leverage” and this could be provided with low ICR products.
Samuels said product innovation needed to be “borrower-led” and predicted 2020 would bring a shift in purchase activity due to “political stability” and “pent up demand”.
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He also said the specialist sector was competitive, so for lenders to maintain market share they needed to look at the needs of borrowers.
Samuels said: “You just can’t stand still at all. You’ve got to constantly looking for solutions for borrowers who fall outside of mainstream.
“We’ve got to look at expanding our criteria safely.”