Much like our lives, there are touchstones moments in our industry that are so significant it’s almost impossible not to reference everything back to them.
Clearly, when it comes to the mortgage industry, the Credit Crunch looms large and (as mentioned) it can be difficult not to look at our current world in the context of both post- and pre-Crunch.
Just lately, there seems to have been a spate of comparisons being made back to the pre-Crunch market in an attempt to justify our current position. There has been a focus on there being more lenders active now – over 100 – than there were back in 2007, and earlier this month Moneyfacts announced that the number of buy-to-let products available had reached its highest number since October 2007.
But are buy-to-let product numbers at 2007 levels a sign of, well, anything? Perhaps that lenders want more business in this sector? Or merely that more lenders are looking at buy-to-let to give them the business they need? After all, with so many lenders to compete against, particularly in the mainstream market, it’s likely that a squeeze is being felt and they are looking at other sectors in order to meet their targets.
But, as I think we’re all acutely aware of, product numbers do not equal product offers. They do not equal actual loans and they certainly do not equal sector experience, specialist knowledge, quality underwriting, service support and client care.
Because I think that, while I can understand, some parts of the market attempting to promote product numbers reaching pre-Crunch levels as a sign of success, the buy-to-let sector is a very different one to its 2007 incarnation. Indeed, it’s a very different one to its 2017 version as we’ve seen the impact of the regulatory and taxation changes, and the raft of other related rules that landlords and the sector has had to cope with.
Indeed, we might also suggest that the sector has changed forever – you’ll note I did not write ‘changed for good’ – and that the buy-to-let market back then, which might have seemed a natural home for the amateur investor looking to make a quick buck or the dinner party landlord hoping to top up the pension quickly, no longer really exists. Or if it does, then it’s certainly in a much more diminished form.
This is now a market of specialists – or at least it should be – and we have certainly seen a significant growth in the number of specialist landlords we carry out business with; portfolio and professional landlords looking for specialist finance, perhaps via a limited company, in order to continue their activity via investments which they intend to hold onto for the long term.
The harking back to some sort of 2007 halcyon days should really be put to bed. Product numbers have now reached the level of just before the Crunch? That’s not necessarily a good thing, given where the market went next, is it?
These are new days and, if we want to be focused on the here and now when it comes to buy-to-let, then we need to accentuate the positives of specialists, both advisers and lenders, because that is really what clients require today. No-one is working in a 2007 market – and we should perhaps be thankful for that.
Jeff Knight is director of marketing at Foundation Home Loans