"The ‘vanilla’ buy-to-let space is not a core market for us at all – it is increasingly technology-led – however there still remains great opportunities in the specialist sector for advisers and lenders."
We spoke to Mike Lane, chief operating officer at Fleet Mortgages, about the biggest changes at Fleet over the past five years, the biggest challenges facing buy-to-let lenders, and why he's incredibly optimistic about the next two years.
FR: What does your role at Fleet Mortgages involve?
My new role covers all aspects of operational activity and, with over 35 years’ experience in mortgage origination and processing, it allows me to take the lead in ensuring we maintain our great service levels – 24 hour-turnaround – using system-driven innovation and excellent, experienced people.
FR: In the past five years of Fleet, what have been biggest changes? Technology? Systems? Funding?
From ‘suitably shabby’ offices in 2014 we have come a long way and I insisted on selecting the ‘best in class’ lender system which has been continually updated.
Funding is where the biggest change has taken place for us. When Fleet started, our funding model (since copied) provided us with limited bargaining power as we needed to prove ourselves to potential sources but as we have grown and clearly demonstrated our expertise and capability, we find many more funders keen to work with us.
FR: What are the biggest challenges facing buy-to-let lenders and advisers right now?
There is no doubt that the impact of recent tax changes continues to affect the buy-to-let market, but it has nevertheless proved to be extremely resilient despite both these changes and uncertainty created by the recent political impasse.
The ‘vanilla’ buy-to-let space is not a core market for us at all – it is increasingly technology-led – however there still remains great opportunities in the specialist sector for advisers and lenders.
Changes such as the new portfolio landlord rules are driving borrowers with more than four properties towards the specialist sector, while almost all new purchases we see are within limited company vehicles. When you combine these with the fact landlords are increasingly looking at HMOs for yield, the future looks positive for a business such as Fleet.
FR: What do you see the growth areas of buy-to-let being in the next 12-24 months?
I’m incredibly optimistic about the next 12-24 months with the recent clouds of uncertainty being lifted from the economy.
While trade talks will inevitably come to the fore of media commentary this year, the feeling of ‘business as normal’ will hopefully soon return and release the pent-up demand for buy-to-let properties.
Based on an assumption that the Government will not wish to interfere further in the private rented sector, I can see the next 12-24 months being extremely positive for advisers and lenders alike.
FR: If you could see one headline about the mortgage market during the rest of the year, what would it be?
It would have to be: ‘Government drops sole commitment to home ownership – tenant and landlord charter agreement helps reverse buy-to-let tax changes.’
While home ownership may be aspirational for the majority, for too long now there has been a lack of recognition that not only is the private rental sector here to stay but it has huge value for the wider population (both young and old), many of whom use it to suit their own lifestyles.
With consecutive Governments also failing to build anywhere near the required volume of housing to meet demand, finding a way to meet the commercial interests of landlords while protecting the residency of tenants would be in the interest of all.