OneSavings lifts loan growth forecasts but warns of weaker Buy-to-Let mortgage market
Specialised lender OneSavings Bank raised its expectations for loan growth today, despite pressure on profit margins amid a weaker Buy-to-Let mortgage market.
The FTSE 250 firm’s loan book grew 11 per cent to £8.1bn during the first six months of 2018, with full-year targets for net loan book growth upgraded to high-teens percentages from an earlier forecast of mid-teens.
In its half-year report OneSavings, which owns the former building society Kent Reliance, also posted pre-tax profits of £91.8m, rising 17 per cent from the same period in the previous year.
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Yet the firm, which has an increasing focus on mortgage lending to professional landlords, warned that tax changes and regulation in the Buy-to-Let market was hampering demand for new purchase mortgages.
The caution comes amid fears that the UK’s taxation system is causing an exodus of smaller landlords from the housing market, according to a recent poll from the Royal Institution of Chartered Surveyors (Rics).
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OneSavings Bank's share price edged down 1.5 per cent in early morning trading.
Group chief executive Andy Golding said: "Whilst regulatory and tax changes in the Buy-to-Let market have dampened industry-wide demand for new purchase mortgages, this has been partially offset by an increase in demand for remortgages.
"There will be further planned expenditure in the second half, as we invest in technology infrastructure and enhancements to our online savings and mortgage origination platforms."