A former senior Barclays banker is launching a new bank this year targeting the buy-to-let market and professional landlords.
Money Marketing understands OakNorth, which is currently applying for a UK bank licence, has been in talks with a number of mortgage brokers about launching in the UK buy-to-let market.
The commercial bank is the brainchild of former Barclays global corporates managing director Richard Davies, who is founder and managing director of the new lender.
Davies is working with former Aldermore group operations director Chris Dailey who is OakNorth chief operating officer.
The new bank will focus on fast growing small and medium sized enterprises as well as property developers, high net worth individuals and venture capital firms. It will offer savings and lending products to small firms, including landlords.
The Business Mortgage Company managing director Andy Young says: “The wholesale markets are more fluid and the securitisation markets are beginning to open up. It will provide opportunities for more wholesale funded lenders to enter buy-to-let.
“Hopefully there will be more lenders for professional landlords and limited companies. That is the end of the market where competition is still weak and we need more lenders and schemes.”
CHL Mortgages managing director Bob Young expects more specialist buy-to-let lenders to launch this year as investors back the market.
He says: “There are pension funds and insurance companies interested in buy-to-let because it matches their investment terms. It would not be surprising to see more lenders come into the marketplace.”
But Mortgages for Business managing director David Whittaker says: “If someone was to launch from a cold start they would be unlikely to achieve any significant volume in a year. The real focus is bigger lenders such as Paragon finally waking up.”
OakNorth declined to comment.