OneSavings boosted by surging rental market

SPECIALIST lender OneSavings Bank’s profits more than doubled in the first half of the year as demand from landlords and developers sent revenues soaring.

The second half is off to a strong start as well, despite jitters in the housing market caused by the EU referendum, as applications for loans accelerated into the summer, according to the bank’s chief executive Andy Golding.

“There is a lot of talk post-Brexit about the market grinding to a halt, but our application run rate is up,” he said.

“We’ve been out speaking to brokers and in our core markets it is very much business as usual for professional landlords and refinancing applications.”

Refinancing accounted for 60pc of the bank’s business, indicating most of its customers moved to OneSavings Bank from other lenders.

Mr Golding said he was tightening up lending criteria to developers, as their businesses are more cyclical and represent riskier loans in a slowing housing market.

Overall, the bank is forecasting growth of 10pc in the buy-to-let market in 2017, down from earlier predictions of 12pc growth.

Profits totalled £100m in the first half of the year, more than double the £46.6m in the same period of 2015.

The bank’s loan book grew by 17.4pc to £5.4bn while earnings per share doubled to 30.2p, enabling it to increase the dividend by 45pc to 2.9p.

Mr Golding also plans to take full ad- vantage of the new Term Funding Scheme from the Bank of England, under which banks can borrow at just 0.25pc. That will slash its funding costs and lower interest rates on loans.

OneSavings Bank’s shares jumped 16.9pc on the results to 277.3p, although this remains below the 337p they fetched before the referendum.