Virgin Money and Clydesdale pull Buy to Let mortgages

Another crushing blow to landlords. Landlords already face higher rates, eye-watering fees and now they have a reduced choice of lenders to go to. The more lenders in any space, the better, as competition breeds better criteria and helps a wider array of borrowers. It’s always sad to see lenders exit a market.

This is less about lenders pulling back from buy to let, and more about commercial streamlining following Nationwide’s acquisition of Virgin Money and Clydesdale.

Nationwide already has a dedicated buy to let arm in The Mortgage Works, so it makes little sense to run competing brands within the same group. Consolidating lending through one specialist channel is a logical step, rather than a sign of reduced appetite.

That said, this does not mean there are not challenges in the buy to let market. Higher rates, tax changes and increased regulation are all putting pressure on landlords — but this decision is not directly driven by those factors.

Buy to let isn’t dying, it’s evolving. There are still plenty of lenders and options available, particularly for well-structured and professionally run portfolios.

Virgin and Clydesdale withdrawing from the buy to let mortgage market can only be seen as bad news for landlords. Less competition in what is already a difficult market for landlords, will only make it harder to make buy to let properties justifiable. Both lenders policies opened up more options to landlords compared to The Mortgage Works and with them already having a large share of the market, is likely to mean a more expensive mortgage for people who do not meet The Mortgage Works set lending rules.

An inevitable decision when lenders merge together, with Nationwide purchasing Virgin Mortgages a while back. Both Virgin and Clydesdale had popular reputations amongst brokers and Buy to Let borrowers alike, so the withdrawal of both brands from the market will limit choices for many landlords. This will not be the last round of consolidation within the mortgage market, only adding to the woes of property investors.

Losing a lender is never a good day for mortgage brokers. It's not just about having fewer options on the sourcing system butt the loss of distinct criteria that help us find solutions for clients who don't always fit a standard mould, and the healthy competition that keeps lenders' pencils sharp and innovative.

While neither lender was a dominant force in the buy-to-let space, consolidating down to just The Mortgage Works within the group does narrow the field for clients. In a market where landlords are squeezed harder and harder, every option counts.