Northern Rock turns on the lending tap so credit crunch over?

Even Northern Rock by according to the latest reports is looking to grow their lending next year to £9 billion.

This all suggests that the 'credit crunch' is over right?

Well not quite. I was having a meeting last week with the national sales director of one of the UK's biggest mortgage packagers. His view shared by me is that the money markets are stabilising, their are lenders out their with funds and landlords and investors are starting to have more confidence and want to lend to do deals, so back to normal!

Not quite. What we are facing is a 'new' normal when it comes to buy-to-let lending and lending in general.

The Government has financed their round of legislating against over excessive lending and with the FSA likely to bring buy-to-let under their control, their will be fewer mortgage brokers, there are fewer lenders which will mean less choice for landlords.

This in itself will not be a bad thing. The buy-to-let mortgage market had become a bit of a snake pit before the 'crash' as lenders dressed up the same basic products in all sorts of clothes and deals to appear and appeal to confused and often gullible buy-to-let investors.

Now we have less choice, less spin, more transparency where most products are what they say on the tin. You don't have to be Einstein to work out what is the best deal for you from a range of upfront cash back, trail, no fee, fixed collared tracker fix. The chances are it is fixed or variable and you will have to pay a lot or slightly less of a lot as an admin fee in return for a high or slightly lower high rate.

The future I fear will be more regulated, but this in itself will not be too onerous for landlords other than completing even more unnecessary forms, but being landlords we are used to that!

No, my big concern is that there will be enough lenders left in the market to generate real competition between them and keep lender and borrowing rates honest. After the recent mega merger of Lloyds and HBOS all this will be down to skills of the Government and the policy makers to reshape our banking industry to ensure proper competition.

Unfortunately, these same people were on watch to ensure that the banks did not go bust in the first place.

No need to worry there then!

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