OneSavings Bank boss says consumer confidence crash could benefit buy-to-let lender by boosting rental market

William Turvill
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OneSavings Bank reported a 20 per cent jump in profits today (Source: Getty)

The boss of OneSavings Bank (OSB) believes the challenger could benefit from a dip in consumer confidence as people are driven towards renting rather than buying properties.

Andy Golding, chief executive of the buy-to-let specialist lender, said that he and his board are concerned about the state of the UK economy and a government “that’s not sure in which direction it's pointing”.

But, speaking after the bank reported a 20 per cent profit growth in the first half of the year, he said OSB’s “indicators are certainly strong enough for us to grow cautiously in our core market”. He added that OSB is better sheltered from macro-economics than many of its rivals.

“To an extent, I believe that there is some countercyclicality in the private-rented space, versus the owner-occupied market,” he told City A.M.

“So if you have a situation where there is unemployment [or] people get repossessed, it’s the rented sector that they will turn to.

“Or if the consumer confidence is just in that place where people put off the decision to buy a house or to move house, actually again the private-rented sector benefits from that.”

He added: “The house purchase market is driven by consumer confidence. If there’s a reduction in consumer confidence, people put off those big decisions. And that does include first-time buyers taking the leap into the property ownership [market], and people don’t trade up quite as quickly.

“But people still do all the things they’ve always done – they fall in love, they get pregnant, they move with their job – and the private-rented sector has been growing to accommodate that requirement for flexibility.”

OSB’s share price jumped two per cent to 400p today as it reported its interim results for the six months to 30 June.

The challenger bank reported underlying pre-tax profits of £78.4m, up 20 per cent, and loan book growth of 10 per cent.

Read more: OneSavings Bank hails "professionalism of the buy-to-let market"

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