The buy-to-let market is unlikely to see any new specialist lender entrants in the short to medium term, but there is no shortage of funding for active lenders, the Buy to Let Market Forum has heard.
Lenders also noted that they were surprised how long rates had stayed so low and suggested there may be some additional consolidation in the wider lending market.
Speaking as part of the panel debate at Mortgage Solutions’ Buy to Let Market Forum in Manchester, BM Solutions head Phil Rickards explained he felt it was unlikely many lenders would enter the space.
“I don’t think we’ll see lots of new lenders coming into the buy to let space,” he said.
“Probably four or five years ago lenders were thinking it was a fairly lucrative space to play in, but I think a few of them have found it more difficult than they may have expected to take market share.
“We’ve all talked about there being lots of lenders, but I don’t think it’s the sort of market you’ll see lots of new lenders entering in the next few years. Although I may be wrong,” he added.
‘No funding constraints’
Vida Homeloans director of sales, mortgages Louisa Sedgwick (pictured) sought to ease concerns about funding from capital markets drying up for lenders to use.
“We all talk about some lenders struggling with funding, but there are plenty of people wanting to lend money – there are no funding constraints,” she said.
“There is no shortage of funding within the buy to let and residential funding markets.”
However, Sedgwick noted that margins were becoming tighter which was reducing lender profitability.
Speaking earlier in the day, Kensington Mortgages new business director Craig McKinlay added his voice to the surprise at how the current market was playing out.
“It’s a very good time to be a borrower at the moment,” he said.
“I’m not sure how long rates can stay as low as they are, but I’ve been saying that for two years.”
The Buy to Let Market Forum continues next week in Cardiff and Reading, with registration still open.