Lenders are still largely positive about the specialist property investment market, according to a new report from master broker Vantage Finance.
The firm’s inaugural Vantage Point report provides an overview of certain aspects of the specialist lending market from the perspective of 32 lenders.
The report shows the last six months have been particularly positive for lenders, with over 50% recording an increase in lending volumes in all surveyed areas, with the exception of holiday lets.
Expectations for lending volumes over the next six months were generally lower, but growth is still expected in a number of areas. 91% of lenders surveyed forecast growth for limited company buy-to-let finance, whilst 81% expect to see an increase in HMO finance and development finance and 79% in bridging finance.
48% of lenders expect to see an increase in buy-to-let finance over the next six month, down considerably compared to the last six months, where 81% of lenders recorded an increase.
The report also explored lenders’ thoughts around a number of economic, political, legislative, and regulatory constraints coming into play. 31% of lenders that answered on recent changes to buy-to-let stamp duty saw it as the biggest threat to the market.
Unsurprisingly, 59% of lenders do not expect to see an interest rate rise within the next 24 months, whilst 30% do not expect to see one within the foreseeable future.
23% of lenders surveyed also felt the industry is unprepared for the legislative changes which recently came into place under the Mortgage Credit Directive (MCD).
The survey also found the majority (83%) of lenders expect property prices to continue rising over the next 12 months. Many attributed this trend to the simple fact that demand still outweighs supply. 48% of lenders expect to see the biggest level of investment in the South East, whilst London and the South West scored particularly low with only 7% and 3% respectively.
Product innovation was ranked as the biggest opportunity in the market over the next 12 months, earning over half the votes (52%), with comments qualifying it as a solution to the market’s increased competition and bottomed-out rates.
41% of of lenders who answered on experience ranked it as the most important quality when considering new broker partners
Lucy Hodge (pictured), managing director of Vantage Finance, said: “Vantage Finance is one of the UK’s leading master brokers and as a key mediator between lenders and intermediaries over the last ten years, we place great value on the relationships we hold with our lender partners. Part of what makes these relationships so effective is a high level of transparency, communication and mutual understanding.
“In our inaugural Vantage Point report, we wanted to build on these principles of communication and openness by giving lenders the opportunity to share their current views on the specialist lending market.
“The previous six months were undoubtedly prosperous for most lenders and given the recent constraints within the market, a short-term dip is expected. Nevertheless, general sentiment remains positive and the impression is that the specialist lending market has much to look forward to.”