To be described as an ‘industry giant’ is somewhat disconcerting but that was the case when I appeared on a recent panel with fellow ‘giants’ at the recent Buy to Let Club event in Bracknell. Certainly better to be a ‘giant’ than a ‘dinosaur’ I think and it was enjoyable to share the stage with Charles Haresnape (Aldermore), Stephen Johnson (Shawbrook) and Matthew Wyles (Castle Trust) as we drew on our years of experience and pontificated on all manner of buy-to-let market issues.
This was a very well-organised day and was essentially the first event where we put Fleet Mortgages in front of a group of very experienced buy-to-let mortgage advisers. I am pleased to say there was a great deal of interest in our proposition, in particular our criteria and the products we will be launching to market soon. Indeed, according to the Fleet sales team, there were a few deals which could have been signed off there on the spot. They will have to wait until we open our doors but it was heartening to see such willing on the part of the brokers we met.
While the panel debate might have been the last point on the agenda, it was still a lively affair with plenty of questions for panelists from the brokers assembled. What came across, certainly from the questions asked, was a feeling of growing confidence amongst the broker fraternity and an urge to see that confidence mirrored by the lender representatives. I lost count of the number of questions which were variations on the theme of, ‘What will be the growth in the buy-to-let market in 2015 and beyond?’ or ‘How much gross buy-to-let lending will there be over the course of the next 12 months?’
The good news for brokers is that, to a man, my fellow panelists and I only saw good things ahead for the sector, in terms of new lenders entering it – including yours truly, increased lending levels, more product choice, an increased focus on niche areas, and a willingness to engage with the broker community in order to achieve this.
This was probably music to the ears of those there, however you also do get the feeling – particularly for those who lived and worked through the credit crunch and beyond – that brokers are very in tune with the vagaries of the market and the potential for it to go pear-shaped, seemingly at the drop of a hat. Looking back at the market from over six years ago it seems obvious that it would all end badly, but back then few truly anticipated it going so spectacularly wrong. Now, quite rightly, we are a far more cautious bunch and therefore talk of a significant upsurge in business might well be treated with a large pinch of salt.
However, in the case of the buy-to-let sector, we truly believe that its future looks very rosy – indeed, we wouldn’t be launching a specialist buy-to-let lender at this time if that wasn’t our thinking. The demand drivers and the demographics of the UK are all aligned in a way which makes the private rental sector even more important. As was pointed out at the panel, we are probably at the start of a inter-generational sea-change in the way the population is housed moving to a point where renting becomes the dominant option over owner-occupation. Indeed, future governments will be relying on the PRS to fill the burgeoning housing gap, and when you add in the growth in households, the tighter affordability criteria for mortgages and the simple fact that we are not building enough new homes, you have a recipe for buy-to-let market growth.
Therefore, while we are right to be cautious about predictions of huge growth and perhaps somewhat fanciful gross lending predictions, it’s also the case that the buy-to-let market is (for the foreseeable future) only likely to move in one direction. And intermediaries are the chosen distribution channel for the growth in mortgage sales. Fleet Mortgages certainly intends to be at the heart of the sector, supporting our intermediary partners and we would definitely urge all buy-to-let advisers to have confidence in, and excitement about, what is coming over the market horizon.
Bob Young is chief executive officer of Fleet Mortgages