Vantage Point report reveals lender sentiment still positive on specialist finance market

26 May 2016

New report into the specialist finance market explores the big questions of the day, from lender confidence to legislation
Results show a positive six months for the market, but a slowdown in growth is expected
81% of lenders recorded an increase in volumes for BTL Finance over the last six months, with only 48% predicting growth for the next six months
91% of lenders expect to see an increase in demand for Ltd Company BTL Finance over the next six months

A new report into specialist property investment finance shows lenders are still largely positive about the market. Vantage Finance, one of the UK’s leading master brokers, has released its inaugural Vantage Point report, which gives an overview of certain aspects of the specialist lending market from the perspective of 32 lenders.

The report shows the last six months have been particularly positive for lenders, with over 50% recording an increase in lending volumes in all surveyed areas, with the exception of Holiday Lets. Expectations for lending volumes over the next six months were generally lower, but growth is still expected in a number of areas. Ninety-one per cent of lenders surveyed forecast growth for Ltd Company But-to-let (BTL) Finance, whilst 81% expect to see an increase in HMO Finance and Development Finance and 79% in Bridging Finance. Nearly half (48%) of lenders expect to see an increase in BTL Finance over the next six month, down considerably compared to the last six months, where 81% of lenders recorded an increase.

Market Influences

The report also explored lenders’ thoughts around a number of economic, political, legislative, and regulatory constraints coming into play. Nearly a third (31%) of lenders that answered on recent changes to BTL stamp duty saw it as the biggest threat to the market.

Unsurprisingly, 59% of lenders do not expect to see an interest rate rise within the next 24 months, whilst 30% do not expect to see one within the foreseeable future.

Nearly a quarter (23%) of lenders surveyed also felt the industry is unprepared for the legislative changes which recently came into place under the Mortgage Credit Directive (MCD).

Property

The survey also found the majority (83%) of lenders expect property prices to continue rising over the next 12 months. Many attributed this trend to the simple fact that demand still outweighs supply. Nearly half (48%) of lenders expect to see the biggest level of investment in the South East, whilst London and the South West scored particularly low with only 7% and 3% respectively.

Opportunity in the Market

Product innovation was ranked as the biggest opportunity in the market over the next 12 months, earning over half the votes (52%), with comments qualifying it as a solution to the market’s increased competition and bottomed-out rates.

Broker/Lender Relations

Forty-one per cent of lenders who answered on experience ranked it as the most important quality when considering new broker partners

Lucy Hodge, MD of Vantage Finance, commented on the report:

“Vantage Finance is one of the UK’s leading master brokers and as a key mediator between lenders and intermediaries over the last ten years, we place great value on the relationships we hold with our lender partners. Part of what makes these relationships so effective is a high level of transparency, communication and mutual understanding.

“In our inaugural Vantage Point report, we wanted to build on these principles of communication and openness by giving lenders the opportunity to share their current views on the specialist lending market.

“The previous six months were undoubtedly prosperous for most lenders and given the recent constraints within the market, a short-term dip is expected. Nevertheless, general sentiment remains positive and the impression is that the specialist lending market has much to look forward to.”

To view the full report go to: http://vantagefinance.co.uk/Vantage_Point_Report.pdf