Annie Crust: “Why I’m cautiously optimistic about the BTL market”

“In the 15 years since MT Finance was founded by Joshua Elash and Tomer Aboody, we have formed a reputation for finding solutions within lending when many high street counterparts appear to shy away. Established in 2008 after the start of the last liquidity crisis and originally dealing solely in bridging, the founding directors managed to buck the trend and created what is now a multi-award-winning business going from strength to strength. Once again, timing being everything, they soft launched into buy-to-let in July 2022, not long before Liz Truss and Kwasi Kwarteng’s disastrous mini-Budget. Incidentally, I started the same day as Ms Truss… happily I have lasted longer in my role and here I am today!

“Under normal circumstances I am sure many would question our continued appetite as a ‘new’ lender in the buy-to-let space and I won’t pretend that the last 12 months have been a breeze. However, where there is disruption there is also opportunity. Part of my role is being tasked with opening up distribution channels and trying to get our client-centric message out to all our broker partners. I have been very lucky as reputationally we are positioned well and the support from our existing network has been phenomenal. I am also hugely lucky to work with Marylen Edwards, our Head of Lending – BTL, who, with a similar background to myself, always looks to find reasons to ‘do’ the deals and not for reasons to decline them. This mantra has been rolled out to the entire underwriting team and it certainly makes my life an awful lot easier.

“The current challenges are many and what I think is sometimes forgotten is that brokers and lenders are on the same side. My background is as a broker so therefore I tend to find myself fighting hard for those I work with, although there are always some external factors we simply can’t control.

“Market volatility and rising rates have caused so many headaches, sleepless nights and countless rekeys. MT Finance always tries to give at least a week’s notice of any upcoming rate changes but it has been tough times for all parties and my heart genuinely goes out to all brokers in the current climate. Having said that, we recently had some good news in the form of falling inflation and most importantly, core inflation coming down which appears to have injected a little more confidence into the financial markets. I am hoping we begin to see some stability return as well as less aggressive BBR rises than were anticipated only a couple of weeks ago. Today’s announcement will certainly be interesting!

“One of the biggest challenges of the last 12 months is working out how we can help brokers and their clients with the issue of affordability and leverage. By keeping ICR at 125% – even for our higher rate taxpayers – and stressing at payrate, this has gone some way towards this. I do think lenders are going to keep striving for more product innovation. Brokers are naturally incredibly resilient and, in my view, it is incumbent on us, as lenders, to support you. This should be a continued two-way conversation where your ideas as brokers can help influence the product design that will enable you to place these cases.

“There are still huge opportunities and we are seeing an increase in borrowing from people who have bridged to convert commercial properties to residential, HMO conversions and MUFBs. This will result in more affordable housing for tenants as well as increased yields for the landlord.

“The private sector is essential given the lack of affordable local authority housing and I expect demand will continue to be high as stock remains low. We are seeing an uplift in rentals from landlords as they are also being squeezed by increased mortgage rates and overall costs. Often, landlords are reticent about raising rents for good tenants but the reality is they are in a no-win position themselves and so options are limited. Whilst the ‘squeeze’ appears to be required for the much-talked-about ‘reset’ and inflation-lowering tactics, we aren’t naïve to the pressures this brings to ethical landlords who form the majority.

“Another area landlords are challenged in is in regard to the current lack of definitive guidance regarding EPCs. The sooner we get absolute direction from both the government and the FCA the better. Speaking to brokers in the north with low-value portfolios and current E class older properties, their opinions are that the prohibitive costs involved with upgrades will mean it is more cost effective to release their properties for sale. This could create opportunity for the first-time buyer residential markets but that is, I guess, looking for a silver lining in a very bleak cloud.

“Overall, the outlook is much brighter earlier this year. We can see fixed rates reducing. We can see market confidence improving and we can see brokers, who have been through so much since COVID, begin to look up from the trenches and tentatively remove their tin hats.

“When I started in the industry 24 or so years ago I was once told it is always better to show a broker death and give them fever but I think we’ve seen enough death and fever for now and, without appearing to want to live in an unrealistic utopian bubble, I do see more than a few green shoots of what looks like recovery on the horizon, and this is backed up with continuous increases in enquiries, cases and completions.

“If you would like to find out more about our buy-to-let products or have a case to discuss, I can be contacted via Alternatively, you can discover more information here. “

Initially starting her career in finance as a graduate trainee, Annie has worked in the industry for over 20 years. With both operational, broker and lender experience, Annie is committed to maintaining a ‘can do’ attitude and looks to find reasons to ‘do’ deals and strives relentlessly on behalf of the broker. She has a unique perspective having gained vast experience from all sides of the industry and believes building strong relationships with brokers and understanding their goals is key to providing the best service. Having joined MT Finance’s buy-to-let department in September 2022, she has brought this wealth of knowledge and experience to her role of National Sales Manager.