Santander buy-to-let entry a bridging boost

Alan Cleary, managing director of Precise Mortgages, said reports that Santander and possibly RBS are poised to enter the buy-to-let market will boost lending to landlords by bridgers because it will increase the number of exit routes for borrowers.

He said: “Big lenders like Santander coming into buy-to-let will help bridging. It’ll make business bigger because we’ll have more exits then. We’ll lend more money as a result of that.”

Cleary suggested growth in the bridging sector will be underpinned by rising demand in the private rented sector and he added: “There’s a structural shift in this country away from owner-occupied into private rental sector.

“Developers are moving properties out of owner-occupied into private rented and in order to make the deal work for a lot of these properties, you need to find some way for a developer to make the value increase.

“They’re either going to try below market value or buy a property that isn’t mortgageable, so they get it cheaper. Stick a bathroom in it, paint, do a bit of refurbishment, whatever it is and bring it into private rented. That is where the growth is.”

Brightstar Financial managing director Rob Jupp said: “Alan’s spot on and in the last year you’ve had lenders like Aldermore Commercial and Whiteaway Laidlaw Bank (now Shawbrook Bank) into the market and they are unsung heroes of the bridging world.

“They now provide exits on deals and more deals are getting done. That’s where I see the real opportunity, if we can see more exit lenders coming in. My concern at the moment is that in the absence of those, there can only be a finite market for bridging.”