Fleet Mortgages to move into commercial lending

Fleet Mortgages to move into commercial lending

In the nine months to the end of September Fleet Mortgages had £800m worth of buy-to-let business put through its system by intermediaries.

With regard to completions, the lender has now passed its target yearly run rate of £450m of lending and has set itself a renewed 2016 target of £750m of lending.

The third quarter of the year has seen a 55 per cent quarter-on-quarter growth in applications with the product split being about 50 per cent standard buy-to-let, 25 per cent limited company and 25 per cent houses in multiple occupation (HMO) business.

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In recent months Fleet Mortgages has seen a noticeable uptick in limited company enquiries, which the lender puts down to the interest generated by the government’s decision to cut tax relief on buy-to-let mortgage interest payments between 2017 and 2020.

The cut is not applicable to buy-to-let properties within a limited company structure and Fleet Mortgages believes more landlord borrowers will look to explore this option for existing and new properties within their portfolio.

The lender has recently increased the number of limited company buy-to-let products it offers and it expects this part of the market to grow during 2016.

Next year will also see Fleet Mortgages move into larger portfolio lending for professional landlords, semi-commercial and eventually full commercial.

At present Fleet Mortgages is developing its systems and processes to deal with these new launches which are likely to be ready from the second quarter of 2016.

Bob Young, chief executive of Fleet Mortgages, said: “In a sense we are operating as a David in a world of Goliaths and I think we all know how this turned out.

“We’ve been particularly pleased with the quality of business we’ve attracted, which has been much higher than even we expected and has allowed us to make some significant criteria changes recently such as increasing the maximum loan value and the maximum loan exposure for new borrowers.

“Fleet Mortgages is incredibly fortunate to have a great team, a lot of experience and fantastic partners in BlackRock who have been very supportive of our plans. A big thank you must also go to our distributor partners and the individual advisers who have engaged with us wholeheartedly.

“To have achieved the lending volumes at the credit quality we have, and to be profitable within 12 months is a staggering achievement – one I always knew was possible but to actually have done it is very gratifying.

“We now look forward to the next year where we will continue to focus on maintaining our commitment to the intermediary sector and ensuring we continue to deliver the buy-to-let products clients want and need.”

Last month Bank of England data revealed lenders reporting during the third quarter of this year demand for secured lending for house purchase increased significantly, particularly for buy-to-let.

This data tallied with that published this week by other bodies including the CML that witnesses a significant uptick in buy-to-let lending during August compared to the previous year.