"The idea that buy-to-let lending will fall so significantly that it will see lenders go out of business is a fallacy. "
I read an interesting article recently on the future of specialist lenders following the challengers in the buy-to-let sector.
The gist of the piece was that specialist lenders have done very well for themselves from the success of the buy-to-let market and if business is curtailed as a result of the changes the sector has seen of late these lenders could be hit hard.
While I understand the point being made, I disagree on two fronts.
Firstly, the idea that buy-to-let lending will fall so significantly that it will see lenders go out of business is a fallacy. Yes, there are few buy-to-let purchase mortgages being taken out at present but the remortgage market is still strong and for many larger landlords it’s very much a case of business as usual.
Secondly, the vast majority of specialist lenders have more strings to their bow than standard buy-to-let. Many are involved in a whole range of different areas and sectors.
Across the financial services industry we’re recognising that there is no longer such a thing as a standard, prime, vanilla client. The way in which we live and work and earn has changed considerably and as a result the financial solutions we require have changed too.
Specialist lenders have responded to this, much more so than their high street counterparts. They’re exploring untapped areas and carving out new niches in order to meet the demands of non-standard clients.
As a result, they have a wide range of products on offer and are able to cater to even the most specialist of clients.
Indeed, I think specialist lenders are best placed to weather the storms that will inevitably arise in the mortgage industry. Clients will only continue to have more specialist needs in 2019 and beyond and the industry as a whole must be looking at how to cater to them.
Finally, as this my last column of the year I’d like to take the opportunity to wish you all a very Merry Christmas and a peaceful and prosperous New Year.