Mortgage Solutions: It’s been eight months since launch so how much buy-to-let lending have you done/do you expect to do by the 12 month mark?
Phil Cliff, director of retail assets, Santander: Since the launch of our new buy-to-let offering back in December, our lending has been in line with our expectations and consistent with our lending appetite for our target market. We are on track to see our natural share of this market by the end of the first year as we continue to meet the needs of our intermediaries and their clients.
MS: What did you learn from the launch?
PC: We felt well prepared for our re-entry into the buy-to-let market as we were able to draw on previous experience in this sector. We were confident that we had the right systems and processes in place to support the demand and this has proven to be the case. Since launch, we have also taken the opportunity to expand our product range, by offering percentage fees in addition to our competitive fixed fee products giving more choice to our intermediaries and their clients.
MS: What would it take for the market to start innovating/shocking on the product-front?
PC: Innovation in the mortgage market is notoriously difficult, particularly in segments such as BTL. I believe most lenders will be focussed on understanding the changing regulatory environment rather than looking to innovate.
MS: There’s so much hope tied into the buy-to-let market as the only sector that’s growing. Is it fulfilling its promise?
PC: Even though buy-to-let lending is running at only around a third of its peak levels, the sector is continuing to grow. With tenant demand still strong coupled with a low interest rate environment, we believe that this sector will continue to increase its share of the mortgage market.
MS: Do you think an investment background could benefit a buy-to-let adviser as some in the industry argue?
PC: Whilst having an investment background has its obvious advantages, we feel the most important thing is that any would be investor receives proper advice from an intermediary so that they fully understand the risks associated with this type of investment. But, BTL mortgages are not suitable for all customers. The responsibility of becoming a landlord and managing fairly common events such as property maintenance, property damage, tenant arrears or non payment and rental void periods means that prospective landlords need to consider the risks and issues against the benefits of becoming a landlord. The intermediary will make sure that all of these considerations are known to the client before they make a decision to proceed.
MS: Santander has been candid it is not looking to expand mortgage market share. Could buy-to-let be the exception in the next 12 months?
PC: We welcome the Government’s Funding for Lending Scheme and are supportive of the initiative as it seeks to provide support to the broader economy at a time when markets continue to be difficult. We are currently examining the detail of the scheme. Santander is committed to supporting British families and businesses and has been a consistent mortgage lender throughout the financial crisis and has increased lending to firms by 20% for the last three years. We expect our volumes on BTL mortgages to continue to grow through 2013.
