One to one with Fleet Mortgages’ Mike Lane and Steve Cox

  • 28/06/2022
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One to one with Fleet Mortgages’ Mike Lane and Steve Cox
Victoria Hartley, group editor of Specialist Lending Solutions, sits down with professional buy-to-let lender Fleet Mortgages’ CEO Mike Lane (pictured) and chief commercial officer Steve Cox.


Starling Bank bought specialist buy-to-let lender Fleet Mortgages for £50m in July 2021, bringing its first chapter as a warehouse-funded lender to a close and opening the door to its bank-funded era.

In February this year, Bob Young retired after he and the team almost doubled lending to £782m over the 2021 financial year and new CEO Mike Lane was appointed. He admitted the change of title from chief operating officer hasn’t made seismic changes to his day-to-day, but that the umbrella has certainly ‘got bigger.’

“Suddenly, you’re very aware of the responsibilities, which are much greater to be honest with you. I’ve been really excited by the opportunity to actually do it. I’m engaged in taking the business forward and I have a vision in terms of where I want to take it. We built a really good business in the first place, so it’s not as if we’ve suddenly had to change direction.”

Starling’s chief executive, Anne Boden, called the Fleet Mortgages acquisition the start of its move into mortgages as an asset class and the bank bought a £500m mortgage portfolio from Masthaven earlier this month. The bank was also reportedly among the bidders for Kensington Mortgages which Barclays agreed to buy at the end of last week.

A quarter of Fleet’s 2021 business came from portfolio landlords and half from limited company applicants. The ‘acquisitive landlord community’ drove growth on the purchase side last year to 42 per cent of overall lending, with a higher proportion of its business coming from the Midlands and the North than ever before.

On any changes brokers might see from diversified funding lines, CEO Mike Lane confirmed Fleet sees plenty of road ahead to increase volumes in its current specialism and has ‘no immediate plans’ to edge toward mainstream residential mortgages or the other direction into more specialist areas like bridging.

“We’re good at what we do in terms of the specialist buy to let stuff and there’s plenty of scope for us to increase volumes. We haven’t exhausted where our expertise is yet before needing to do that,” said Lane.

He added that Fleet has plenty of interesting discussions in-house about where lending might go or the opportunities Starling might see, especially as the bank is heading toward an IPO in the short-term. However, he said: “We just don’t have the bandwidth to leap into adjacent markets, despite growing and recruiting – we’re up to 130 full-time employees right now. We don’t want to take our eye off the ball.”

CCO Steve Cox said preserving service in line with growth was paramount.

“Probably at least half of what we do on price is about capability to process and preserve service. So at times in the last couple of months, probably as we go through the next few weeks, we will go up in price, not necessarily due to pure commercial pressures, more that if we get left holding the baby service will fall over and then all the hard work goes out the window,” he said.

“What we’ve seen particularly in the last six months or so, is that a lot of the capital market funders have drifted out of the market. They’ve drifted out because of market rates. We’ve stayed in the market. So your bank based lenders have drifted towards the top of the pile, if you like, in terms of the major competitors in the market at the moment


Outlook for buy to let

On the coming year, Cox said all the macro-economic factors including the lack of social housing point to a strengthening backdrop for buy to let.

“When the economy and life are uncertain, tenancy demand rises. Either people can’t buy property or are unconfident to buy and as interest rates rises, that will take people out again on affordability.”

“People have got to live somewhere. It’s as simple as that,” he added.

Cox said landlords are manoeuvring to capitalise on superior rental yields in the Midlands and northern university towns, or Houses of Multiple Occupation (HMO), because landlords can’t get the same capital growth in the South East.

The green drive to decarbonise housing stock to the required A to C Energy Performance Certificate level and the subsequent remortgage push is an opportunity for brokers, who can advise landlords on how to restructure finances to drive renovations, said Cox, wherever the final deadline for the work ends up.

He added that advisers are the only people in a position to do the discovery work for portfolio landlords and discuss the ability of lenders to offer further advances, which warehouse lenders can’t under their funding agreements, adding that a Fleet-to-Fleet remortgage option is currently under review.

Fleet expects there to be an extension to the PRS’s deadline of 2025 for the green rehabilitation of all buy-to-let housing stock. Plenty of landlords are taking on the work, others might simply try to sign a rental agreement extension the day before the deadline to swerve it, but it is creating an energy that’s just going to ‘keep galvanising the market,’ said Cox.

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