"If a customer can show they have the means to afford the loan for a buy-to-let, their age shouldn’t stop them from being able to finance that."
FR: How do you think regulatory changes, including a rise in stamp duty and tax relief cuts, will affect the buy-to-let sector over the remainder of the year?
The impact of the buy-to-let changes will vary regionally and also in terms of the audience. For example, we’re finding that the general perception is that the increased stamp duty and other changes won’t deter property professionals or seasoned investors as much as it would be likely to affect a parent wanting to help their child get on the property ladder, or a family looking to buy a holiday home.
We recently conducted some research in relation to this, which spanned the UK, and it showed that over a fifth thought that the changes would deter homeowners from buying a second home, whereas only 13% thought that investors or professional landlords would be put off.
The 3 per cent stamp duty hike will be felt more acutely in areas like London and the South East, due to the high value of the properties there.
FR: Together recently removed upper age limits on its buy-to-let range – what will the result be and do you think other lenders will follow suit?
For us at Together, the change regarding the age limit reflects our common sense approach to lending, as we’re saying that if a customer can show they have the means to afford the loan for a buy-to-let, their age shouldn’t stop them from being able to finance that.
The reality is that nowadays, retired people can have income from a variety of sources, and often rental income is part of that. If they want to continue to grow their property portfolio, there’s no need for an upper age limit, particularly when you consider our aging population. There are currently 11.4 million people in the UK aged over 65 years old and according to the latest official projections this is expected to grow by 12% by 2020. For that reason I think age limits are something all lenders will be looking at carefully in the coming years.
We also recently increased our new loan size on buy-to-let first charge mortgages and this will help ensure customers have access to loan amounts that reflect the property market. We expect to see an increase in applications for larger loan sizes as a result of that.
FR: Together recently reported record lending figures - have you got any big plans or exciting news coming up that you can tell us about?
Together has enjoyed phenomenal growth in recent years; we created the new brand in September 2015 to unify our group of companies, we have a loan book in excess of £1.7 billion, we hit our record monthly lending figure, as you mention, in March 2016 at £105 million, and our staff headcount has grown 22% in the past 12 months, creating more than 125 new jobs for the economy.
Moving forward we just want to build on this and we’ve got a new corporate structure to help make that happen, with the business now divided into two independent divisions for retail and commercial. We’ve made a lot of high profile appointments at board level to put this into practice and I think the business will just go from strength to strength with the combination of the expertise and knowledge we already have, and this enhanced team.
FR: How is technology improving the way the financial services industry works and how can brokers utilise this?
Obviously technology is playing an ever more important role in the industry. At Together we’re continuing to invest heavily in our online platform: MyBrokerVenue, which allows brokers to submit applications online and this really speeds up the whole process. In this industry, time is of the essence and we’re committed to continually improving and streamlining our processes wherever we can.
We also work with our intermediary partners on integrated systems; we recently announced that we are the first lender to join AtoM’s integrated system for brokers and we also partnered with Lender Gateway to be part of the their streamlined portal.
FR: If you could see one headline about financial services in 2016, what would it be?
With the uncertainty in the financial services sector resulting from the recent Brexit vote, I think it would be unwise to make any predictions – our approach at Together is to monitor the situation closely and support our brokers as much as we can. As one of the few independent lenders to have survived the credit crisis, our 42 year history stands us in good stead to face any challenges and we’ll be working closely with our broker partners to help them through this transitional period, as we move into the latter half of the year.
