‘Bold and innovative moves’ leading busy buy-to-let market – Ying Tan
by: Ying Tan, founder and chief executive of Dynamo
‘Bold and innovative moves’ leading busy buy-to-let market – Ying TanIt certainly was a mixed bag when it comes to product- and criteria-related news from the buy-to-let (BTL) sector over the last month.
When I say mixed bag, I don’t mean a combination of bad and good — it has been overwhelmingly positive. What I mean is, it’s been great to see so many bold and innovative moves being made by an array of lenders.
Let’s start with the innovative launch of Foundation Home Loans’ Green Reward remortgage for landlords.
The five-year fixed-rate mortgage for landlords is available for remortgage only on private rental properties with an Energy Performance Certificate (EPC) rating of C or above, dated within the last 12 months, except for listed properties which are not eligible.
For those that qualify, Foundation is offering a 3.75 per cent rate up to 75 per cent LTV, with £750 cashback on completion plus a reduced fee of 0.75 per cent.
The lender has introduced a 70 per cent LTV five-year fix at 3.39 per cent with a maximum loan size of £1m, and a 75 per cent LTV five-year fix at 3.49 per cent with the same maximum loan size.
In addition, LendInvest has reduced rates across its five-year fixed rate BTL range, with its 65 per cent LTV product now available from 3.29 per cent with a maximum loan of £1.5m.
It is also offering cashback towards legal fees of 0.25 per cent of the loan amount up to £1,000 on qualifying five-year fixed rate products.
Fleet Mortgages has announced a range of price cuts on two and five-year fixed rates across its three ranges – standard, limited company and houses in multiple occupation (HMOs).
As part of its product changes, Fleet has moved all 60 per cent LTV products up to 65 per cent LTV and has also specifically cut rates on those five-year fixes – standard and limited company products – where its rental calculation is based on the payrate.
Habito has reduced its buy-to-let mortgage rates. The lender’s BTL fixed rates now start from 3.04 per cent, which is a 0.10 per cent reduction.
For individuals and limited company products at 75 per cent LTV, rates now start from 3.29 per cent which is down by 15 basis points.
Looking to fee-assist BTL fixes, products now start from 3.16 per cent for individuals and 3.12 per cent for limited companies. These products come with £750 cashback, and free conveyancing for customers buying in their own name.
Paragon Bank has introduced two remortgage-only products, which both include £500 cashback and a free mortgage valuation. In addition, the offerings are available to landlords remortgaging in their personal names or through their limited company.
Lending policy and criteria
Focusing our attention on lending policy and criteria, Coventry for Intermediaries has improved its affordability calculations for buy-to-let lending.
The lender will now apply a reference rate of 4.5 per cent for all five-year and above fixed rate calculations, down from a previous rate of five per cent.
Accord Buy To Let has increased its maximum borrowing limit and overall portfolio size for non-first-time landlords.
In addition, it has reduced its standard valuation and homebuyers’ fees, with the intention to offer greater support to landlords. For established landlords the buy-to-let aggregate lending limits have now been increased from £1m to £3m.
Furthermore, the total number of BTL mortgages a borrower can have with the lender has risen from three to five and the total maximum portfolio size has increased from 15 to no limit.
Finally, West One Loans’ buy-to-let division has extended its borrower exposure limit to £5m for those who meet W1 credit criteria requirements.
In addition, it will now consider licensed HMO properties with up to 10 bedrooms.