Fleet Mortgages is planning to enter the semi-commercial market and could soon launch into bridge-to-let, its chief executive Bob Young has revealed.
Young (pictured) didn’t comment on suggestions it could eventually go into later life lending after hiring Steve Cox from Hodge Lifetime.
Young said: “Semi-commercial, large HMOs is quite close on our timeline.
“Further out we are looking at things like bridge-to-let.
“Our view is we will only do things we know we can do well – we won’t go flailing round looking for opportunities.”
While he said it was always the plan to branch into new sectors, Young admitted conditions are currently tough in the buy-to-let market.
The margins are so squeezed that Young admitted he himself would think twice about launching a new buy-to-let lender in the current climate.
He has already witnessed two potential buy-to-let lenders pull the plug on launching, though he still expects others to take the leap at their peril.
Young added: “There will be some idiot that thinks they know something nobody else does.
“The buy-to-let sector at the moment has the feeling of the sub-prime sector in 2003-4 – the American banks were setting up and did set up sub-prime lenders.
“I would occasionally get a new one sidle up towards me and ask if we can have a chat. They want to do a billion a year at 3% over Libor and make a fortune.
“I kept telling them that it can’t be done; prices are compressing, the market isn’t as big as you think it is and still they went ahead.”