Page 14 - The Pulse Issue 6 Online

remortgages and product transfers than has been the case flat nationally due to the uncertainty around Brexit. In
in the past. London, we may see some small falls in areas that have
increased particularly quickly over the last few years.
Louisa Sedgwick, Vida Homeloans: We often see minor
‘blips’ before a General Election, whilst borrowers take Louisa Sedgwick, Vida Homeloans: It’s likely that we will
a break from looking for their new home or switching see steady house price growth (as we have seen over the
mortgage lender. The Brexit announcement had a similar last few months) outside of London and South East, where
effect, however the bottom line is that people still need a prices are likely to remain static or may see a slight reduction.
place to live and lots of them still need finance options to
enable them to do so. As we arrive at the point of Brexit, Terry Jordan, RBSIP: We might see the same geographical
we may see further consumer nervousness, however only differentiation in house prices as we are currently
time will tell. experiencing. London and the South East may continue
to experience stable prices whilst prices around larger
Terry Jordan, RBSIP: The economy and mortgage market conurbations outside London e.g. Manchester, Leeds and
doesn’t like uncertainty and this tends to dampen customer Birmingham could experience continuing rising prices.
demand. The house purchase market is likely to remain
subdued whilst the growing noises around remortgages Peter McGuinness, Bluestone Mortgages: Whilst there is
are likely to prompt SVR customers to act. a fundamental shortage of housing in the UK, there will
continue to be pressure on house prices to increase,
Peter McGuinness, Bluestone Mortgages: It is probably combined with the current low interest rate environment.
too early to diagnose any long term effects, but so far However, we expect this effect to be moderated by a more
Brexit has not dampened borrowing activity in the UK cautious consumer who may defer a decision to move
mortgage market and the economy has weathered the or upsize until the effect of Brexit is better understood.
storm relatively well so far.
What do you expect the buy to let lending
Do you think there is an appetite for arena to look like by the end of 2017?
interest only lending and under what
circumstances? Ross Turrell, Fleet Mortgages: The buy to ley market is
now adjusting to the new PRA underwriting standard
Keith Barber, The Family Building Society: Yes, we’ve for rent calculation and will likely find its level by the
seen some lenders return to this space. Borrowers need end of the year. However, the next major change will be
to be realistic about how and when they will pay back the implementation of the final part of the recent PRA
their interest only loan. Brokers have a role to play in supervisory statement which brings in stricter underwriting
this, challenging the assertion “we’ll downsize” as when it for portfolio landlords. We are likely to see some polarisation
comes to the crunch, many people are reluctant to do so. of lenders, those that have the appetite to continue to do
Stamp duty levels are a hindrance to this – why downsize business with landlords having four or more mortgaged
if you can avoid writing a cheque to the HMRC? buy to lets – which will generally be the specialist lenders
and the bigger players, and those lenders that will purely
Louisa Sedgwick, Vida Homeloans: Interest only is a deal with the part-time landlords with small portfolios.
credible solution for some customers, not all. Where it
could be deemed appropriate is for later life borrowers, Keith Barber, The Family Building Society: We expect it
where downsizing is an option and interest only is a more to polarise between professional landlords with significant
affordable proposition. Young professionals who start on portfolios using limited company structures and continuing
the housing ladder on interest only however switch to a much as before otherwise. Part-time and accidental
repayment mortgage as they mature into their roles and landlords may find that the tax changes mean that having
their affordability allows them to do so. buy to let property is a net drain on their incomes and may
want to exit if they can’t pay down some of their debt.
Terry Jordan, RBSIP: At RBSIP we continue to support the Louisa Sedgwick, Vida Homeloans: The future for the
interest only market and continue to allow interest only buy to let market remains very bright. The pathway
lending subject to certain criteria. There remains a market will invariably change over the next few months as we
for the more financial sophisticated and astute borrowers see the next regulatory change take effect at the end of
who have a repayment vehicle in the background that will September. The taxation changes have yet to take effect
cover the balance outstanding. as they are being phased in and as such landlords have

not yet felt the pain of the changes implemented in 2016,
Where do you think house prices will be in these will start to bear fruit later in 2017. We may start
the next 12 to 24 months? to see a change in the demographic profile of the landlord
over the next 12 – 18 months, where the buy to let limited
Ross Turrell, Fleet Mortgages: House prices are looking to company landlord will start to overtake the ‘sole trader’,
remain fairly flat this year as affordability remains tight, who may choose to dispose of any buy to let properties, in
before starting to increase at a modest rate in 2018. particular where this is a hobby and not their main source
of income. Either way 2017 will see a reduction in overall
Keith Barber, The Family Building Society: Pretty much buy to let lending as landlords take stock and plan their

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