AMP Bank has confirmed it will recommence lending to property investors after regulatory pressure forced the group to exit the market earlier this year.
Following industry speculation about its future in the investor lending space, AMP confirmed this week that it intends to resume writing new investor home loans before the end of the year.
“Our intent has always been to recommence investor property lending this year,” an AMP spokesperson said. “We’re actively monitoring our portfolio and we remain committed to that timeframe.”
The bank shocked the industry when it announced in July that it would no longer accept new or assess existing investor loan applications in response to APRA’s crackdown on investor lending.
News of the non-major's return to investor lending was met with mixed reactions from brokers yesterday.
Intuitive Finance director Andrew Mirams told The Adviser that even AMP's greatest advocate would have difficulty providing them with new business after they pulled out of the market "at the drop of a hat".
"How do we trust them? How do we go forward and recommend doing more business with AMP when at the drop of a hat they pulled out of the [investor] market? They won't be attracting any of my new business," he said.
"You put your left foot in, you put your left foot out. We're not doing the hokey pokey."
Meanwhile, Shore Financial broker Anthony Roddy said AMP's commitment to re-enter the investor market this year is "good to see".
"We obviously do a lot of business with real estate agents, and one of the major concerns a lot of agents have at the moment is the way that the market has cooled off so quickly due to the reaction," he told The Adviser.
"Obviously, taking those investor loans away has impacted the market so much that now with the predicted supply coming onto the market in the next couple of years for apartments, they're really worried that we're going to see it come off significantly more.
"If AMP are going to come back in with investor loans, hopefully we may see a bit of a reduction in the restrictions on investor lending, because as those apartments come back onto the market, I think you're going to need to have some demand there to actually snuffle them up. Otherwise, I think we're going to see prices come off even further."
APRA statistics show that AMP's investor loan growth was 14.6 per cent in July. This slowed considerably to 10.7 per cent in August after the bank pulled out of the investor space.
[Related: AMP reduces rates below 4%]
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