Mortgage brokers believe Metro Bank will not be able to compete with established names in the buy-to-let market due to its direct-only distribution strategy and small number of branches.
Last week, the bank, which was set up in July last year, revealed it is looking to move into the BTL sector in the third quarter of this year.
Yorkshire Building Society announced its intention to enter the BTL sector in October, followed by Abbey for Intermediaries in November. Skipton also said this week it is to return to the BTL market.
Mortgages for Business managing director David Whittaker says: “Metro Bank will not be able to compete with the other big players. Its pen- etration in the market will be so negligible that no one will notice.”
Whittaker says Metro Bank’s direct-only distribution strategy and the fact it only has four branches, all in London, mean it will not attract a large volume of customers.
He says: “If you live in Sussex, are you going to get on the train and go into London to get a buy-to-let mortgage from Metro Bank? It is not going to happen.”
Buy To Let Funding Services principal Geoff Laird says: “Metro Bank will try to attract new buy-to-let investors but most of these would normally use a broker so I do not think it will achieve much market penetration.”