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Buy-to-let lenders make raft of changes with more to come – Armstrong



Buy-to-let lenders make raft of changes with more to come – Armstrong

by: Cat Armstrong, mortgage club director, Dynamo for Intermediaries

Buy-to-let lenders make raft of changes with more to come – Armstrong

This month we’ve seen a plethora of rate reductions, product launches, criteria enhancements, portfolio expansions for international investors and even a new entrant into the buy-to-let sector, which seems like the perfect place to start.

Recognise Bank recently entered the buy-to-let market with a product designed for professional landlords and investors with portfolios of at least four properties.

This buy-to-let deal is the bank’s first new lending product since receiving its full authorisation and the lifting of deposit restrictions in September 2021. With rates from 3.49 per cent, borrowers can choose a five-year fixed-rate deal or a variable deal linked to the Bank of England Base Rate. With a maximum loan-to-value of 75 per cent, loans are available from £100,000 up to £5m on either new acquisitions or for refinancing existing portfolios of four properties or more.

Continuing to work backwards from the list above, Gatehouse Bank expanded its buy-to-let product range for international investors to include Multi-Unit Freehold Blocks (MUFBs). Four of the new products are available to international residents at 65 per cent and 75 per cent finance-to-value and are fixed for two or five years for finance up to £500,000. A further four products mirroring these criteria cater to finance amounts over £500,000 and attract a rental rate reduction of 0.2 per cent.

Loughborough Building Society extended its buy-to-let criteria to include first-time buyers. The products are available up to 80 per cent loan-to-value for first-time buyers who are 25 years old or over, have a minimum income of £25,000 and have a clean credit history. The property must be in England or Wales and the change applies to business and consumer buy-to-let mortgages. However, portfolio applications or applications on flats and apartments will not be permitted.

Accord has improved the criteria for its buy-to-let range by removing the need for landlords to have a minimum background income of £25,000. However, income will still be verified in some circumstances, such as where top-slicing is being used or to validate tax status for some lower rate taxpayers. On a case-by-case basis, the lender will also now consider lending to first-time buyers who want to become landlords.

The Mortgage Works (TMW) relaunched its range of House of Multiple Occupancy (HMO) mortgages. The new rates, available up to 75 per cent LTV, include a two-year fix at 2.29 per cent and a five-year fix at 2.99 per cent. Both products include a 2 per cent fee. The new HMO mortgages are available for purchase, remortgage or further advance with other rate/fee combinations also available.

Paragon Bank reduced rates across four of its 80 per cent and 75 per cent LTV five-year fixed rate buy-to-let products. The reductions across its 80 per cent LTV products include a five-year fix reduced to 3.95 per cent from 4.09 per cent, and the five-year fixed 80 per cent LTV green mortgage reduced to 3.85 per cent from 3.99 per cent. Both products have no product fees and include a free valuation and £350 cashback.

The Nottingham has also cut rates on its no-fee five-year fixed 95 per cent LTV mortgage product, which is now 2.95 per cent down from 3.20 per cent. It has also lowered the rates on its two-year fixed 75 per cent LTV limited company buy-to-let offerings. The society’s £999 fee version has been eased to 2.90 per cent down from 3.00 per cent and its fee-free product is now 3.15 per cent down from 3.40 per cent.

Finally, Shawbrook Bank has introduced a mid-range product to its buy-to-let offering, aimed at supporting portfolio landlords owning simple property types. Customers who meet the criteria will have access to a reduced five-year fixed rate of 4.09 per cent up to 75 per cent loan-to-value.

The run-up to Christmas should remain a busy one and it will be interesting to see what lenders have in store for landlords and intermediaries as they chase the last bits of 2021 business.

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