FR: What do you think will be the biggest influences in the BTL market in the next few years?
I believe the market will continue to grow - as house prices continue to increase, investors will be looking to seize upon opportunities and snap up property quickly, while they are still in a position to do it. We may see regulation being introduced over the next 12 months or so as BTL takes up an increasing percentage of the mortgage market. BTL isn’t currently regulated or included in the Mortgage Market Review but the FCA may look to begin regulating as it continues to grow.
However, the impending European Mortgage Directive, set to land in March 2016, could shake up the industry dramatically. BTL is currently exempt from the directive after lobbying groups argued the first draft didn’t take into account the nuances of unusual mortgage products such as BTL. However, the ruling is still set to have some form of impact on the market as the Treasury will need to transpose the directive into UK law.
It’s also likely we’ll see the HMRC cracking down further on the 1.4million private landlords in the UK following the recent announcement that it is on the trail of hundreds of thousands of private landlords who are said owe an estimated £550m in unpaid BTL taxes.
We could also see the rise of the ‘grandlord’ - a trend we are seeing much more of recently. Following the pension alterations in this year’s budget we could see lots more pensioners withdrawing funds and investing their savings into property. In addition, while interest rates remain low, investors are still looking at alternative options to traditional investments to make the most of their savings.
Of course, product innovation will need to continue as this buoyant market continues to grow and evolve, leading to consumer demand for even better rates and competitive products. Our Blemain Finance BTL rates are at a new lower rate from 9.4% (fees and charges apply) and we’re constantly engaging with our brokers to drive product innovation.
FR: What have been some of Blemain Group’s key milestones in the last year in terms of products?
Our strong appetite for growth has meant our lending has grown significantly over the past 12 months. With 40 years of lending under our belt, we know we can’t rest on our laurels and this year we’ve introduced a number of product changes and updates in line with market trends and broker feedback. Responding to increasing demand from consumers that want to borrow large amounts of money without re-mortgaging, we’ve really focused on the competitiveness of second charge loans and have made positive price improvements in recent months to assist customers in this market.
We’ve also introduced new lower rates on secured loans from 8.7% (fees and charges apply) and changed our applicant criteria so that customers with credit impairment older than 12 months now qualify for better rates. Our view is that everyone deserves fair access to funding so we judge every case on its individual merits rather than a rigid, computerised autoscore method.
FR: How has the relationship between Blemain Group and brokers shaped what the business has to offer?
Our clear, honest and transparent relationships with our brokers has meant our products are created and adapted directly with feedback from them - we see ourselves as strategic partners to our brokers, rather than just suppliers. Brokers are the lifeblood of our business so strong relationships are paramount. We constantly ensure all our products take broker feedback into account and are suitable for their purpose and the dynamic financial marketplace.
FR: What are the biggest challenges facing brokers at the moment and how does Blemain Group aim to help brokers in light of these?
Regulation, without a doubt. We’ve already experienced massive changes in the consumer credit market throughout the first half of the year, with regulation moving from the OFT to the FCA. Brokers had to go through the process of applying for interim permissions to carry on regulated consumer credit activities, and they’ll also need to ensure they’re fully authorised by 2016. The FCA has introduced a phased approach to becoming fully authorised, whereby brokers need to complete a detailed application form concerning their business and financial resources. They will only be authorised if they satisfy the FCA’s standards and continue to satisfy them once they are regulated.
Diversity of funding can also pose a problem for brokers. While there are many lenders operating in the market, many of them are essentially offering the same, or very similar, products. Here, strong relationships between lenders and brokers are essential - a reliable and stable lender can provide brokers with a safe pair of hands to work with, as well as working with them to ensure a diverse product range.
We understand that such a changeable marketplace can be challenging for brokers which is why we ensure our communication channels are always open. Our interpretation of regulation is clear and concise and we’re always on top on the game when it comes to market developments and issues to ensure our offerings remain relevant and competitive.
