Vicky Hartley: Santander has launched gently into buy-to-let as expected – what conditions need to be met before it starts to gear up and aggressively hunt for market share?
Phil Cliff: As you know, we launched in December, at what is a seasonally quiet time for the market. We always said we wouldn’t bring anything to the market until we believed we had the right systems and processes in place to support it and while we were fully confident in our new systems, we preferred to have a slower build to our re-entry to BTL, as we’d been away from the market since 2008. We’re delighted with how our straight-through mortgage processes are working, 100% as planned. This was our biggest Abbey for Intermediaries (AFI) system development for several years, and we now have the platform from which to build our BTL offering. This means we can gradually build our range, introducing more products, and from last week, percentage fees.
We monitor the market very closely, but the key driver behind our plans for BTL is balancing managed growth with the needs of our intermediaries and customers. We have a clear five-year growth plan for BTL but equally important is to ensure we maintain our best in class service levels.
VH: We hear that large percentage fees continue to put landlords off on the remortgage side. How is Abbey addressing these concerns?
PC: The BTL range improvements we made last week are designed to give intermediaries and their clients more choice by offering percentage fees in addition to our competitive £1,495 fixed fee products. Percentage fees offer customers another fee option, and whether for purchase or remortgage, if the customer’s loan size is at the lower end of the market, it can be the right option for that borrower. Our aim is to offer a range of products with fixed and percentage fees so intermediaries can recommend the right product for their client.
VH: What factors could hold back the BTL market this year?
PC: The economic and regulatory landscape continues to paint a challenging picture for all forms of lending, and that provides a similar challenge for BTL as it does for residential lending. As all large banks are required to strengthen their balance sheets, the need to lend prudently has never been higher. Specifically for BTL, I would not expect lenders to be returning to the higher LTVs we’d seen in the BTL peak of 2007, nor seeking to relax policies around rental cover or affordability assessments. We have entered the market with prudent lending criteria and we do not expect the market conditions to impact our lending plans for this year, but we do not expect any spectacular BTL market growth either, given the challenging wider outlook.
VH: Are we going to see more seven-day deals, repeating 2011’s popular marketing tactic from Santander?
PC: We always monitor the market carefully, and continue to work very closely with our intermediary partners to listen to what our customers want. You may have seen our new campaign messages, which we believe sums us up nicely…At Abbey for Intermediaries we’re dedicated to supporting you and your clients….so expect more great service and great products in 2012….
VH: In Miguel’s first trade interview, he told Mortgage Solutions Santander is looking at extending other retail sales out to brokers. What are some of the key issues under consideration here?
PC: Service is key. We have made significant leaps in our process efficiency and service over the last 18 months on mortgages and intermediaries have reaped the benefits of this. Any introduction of other retail sales must mirror this success, ensuring we provide a straightforward platform for intermediaries to do non-mortgage business with us.
