Mortgage brokers had more good news this week as rumours surfaced that Abbey for Intermediaries were close to launching their broker only buy to let mortgage range. Not only are they a lender that is known for their cracking good service but have come to dominate the market with a 20-25% share of residential business submitted by advisers. This domination has come from some amazing ‘sales’ where they offered crushing rates for just 7 days and long term value products – always aiming to land near the top of the buy to let rate charts.
As rental yields have continued to grow as shortages of property across the UK have driven up demand in most parts of the country many more experienced landlords are looking to grow their portfolios and some casual investors with enough capital to spare are considering the market. This combination of factors has led to a massive increase in enquiries about Buy To Let mortgages. Some brokers are reporting as much as half of their inbound calls are relating to new buyers looking at buy to let mortgages – often for non standard property types such as multi unit freehold blocks.
Woolwich recently returned to the market and within weeks were so overwhelmed with applications for their extremely competitive products causing them to temporarily move back to only offering 60% loan to value products. Whilst this move is only temporary it did serve to demonstrate how welcome a new big national lender returning to the buy to let market would be. Clearly there are a lot more landlords looking to buy or refinance their properties than experienced buy to let brokers are able to place with the limited panel of lenders currently operating in the buy to let market.
The first area many are expecting Abbey to target is the high fees currently charged by the lenders dominating the market. Some Mortgage Works products have a 3.5% fee for example. Woolwich fired the first salvo in this battle setting out their stall with a fixed fee of just under £2000 on most of their products. It will be interesting to see how much further the lenders are prepared to cut their fees to compete with an aggressive new player with money to lend such as Abbey.
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