Many people have been looking back at Q1 this month, searching for those positive indicators to suggest that things will now be on the up for the rest of the year.
Swap rates rising have brought some rate increases and potentially delayed some of the anticipated reductions, but the overall picture of late has definitely been of an active market, with lenders still very keen to lend.
It’s been good to see continued product innovation as lenders test the water with different criteria and benefits – let’s hope for more of the same in the coming months.
So, to business. Let’s focus on some of the changes we’ve seen in the last few weeks.
Buy-to-let changes and launches
Paragon has announced a refresh of its buy-to-let (BTL) products, with portfolio fixed rates now starting from 4.14% for single self-contained properties and 4.39% for houses in multiple occupation (HMOs) and multi-unit blocks (MUBs).
The 4.14% starting rate is for a two-year fixed up to 70% loan to value (LTV) for single self-contained properties with an EPC rating of A, B or C. The product fee is 5% and features a free valuation.
Foundation Home Loans has launched new products in its Buy to Let by Foundation range. Its ‘pound-for-pound’ (£4£) remortgage products are assessed at 125% interest coverage ratio (ICR) regardless of tax status and are stressed at pay rate regardless of length of fixed period. Products are available in both F1 and F2 tiers and may appeal to higher-rate tax-paying landlords looking to remortgage on a two-year fixed with more favourable terms.
CHL Mortgages has added a new 3.5% fee option to its standard BTL and HMO/MUFB ranges. A standard two-year fixed product at 65% LTV is now available at 5.21% with a 3.5% fee, while the equivalent five-year fixed is priced at 5.55%. For HMO or multi-unit freehold block (MUFB), the two-year 65% LTV rate is 5.24% and the five-year version is 5.65%, both with a 3.5% fee. Fee options in the ranges are now 2%, 3.5%, 5% and 7%.
Santander has launched a range of BTL two-year tracker rates in its new business and product transfer ranges. The rates in the new business range include a 60% LTV two-year tracker at 5.6% with a £1,749 product fee and a 75% LTV two-year tracker rate at 5.84% with a £1,749 product fee.
Kensington Mortgages has released 75% LTV special rates that are available for both personal and limited company applications. A two-year fixed is available at 5.39% up to 75% LTV with a 3% fee and free valuation. The five-year fixed is priced at 4.89% and comes with a 5% fee and a free valuation.
Adjustments to suit landlord needs
West One Loans now has a new suite, W3, for landlords with previous credit issues. A wide variety of property types will be accepted, and impaired credit older than 12 months, unsecured arrears or missed payments on public utilities and communication suppliers will be ignored subject to a satisfactory explanation.
Available products include a five-year fixed at 7.04% with a 4.99% fee and a five-year fixed at 7.49% with a 2.5% fee, both available up to 65% LTV.
Virgin Money launched its Fix and Switch product in its portfolio landlord range, meaning there is now a Fix and Switch product across all its mortgages. This option gives the benefits of a five-year product, but only has early repayment charges (ERCs) for the first two years. As well as providing security and flexibility, as it’s a five-year product there are also affordability gains to be had.
Mansfield Building Society has introduced proc fees for product transfers across its entire range, including Versatility, Versatility Plus, Credit Repair, Shared Ownership, Buy to Let and more. For cases placed by intermediaries, Mansfield will pay 0.2% as a procuration fee, with an enhanced fee to key club and network partners.
The Mortgage Works (TMW) has said that it will now accept limited company BTL purchase applications for properties currently inhabited by one of the company directors. TMW’s existing limited company product range will be available for these cases.
This move could make it easier for new landlords to enter the BTL market or for existing landlords to expand portfolios.
YBS Commercial Mortgages is now offering simpler, short-form BTL valuations to estimate the market value of a property. The lender has aimed this change at landlords borrowing up to £3m on a maximum of four properties. Properties must be houses or flats to qualify. This change replaces full red book valuations and will help to save both time and money for portfolio landlords.
Zephyr Homeloans has reduced the stress rate calculation on its two-year fixed rates to assist clients with affordability. It is now the higher of payrate +2% or 5.5%. The lender previously included the reversion rate in its calculation.
And, finally, United Trust Bank (UTB) has expanded its BTL and residential product ranges by accepting new-build properties.
Products are available up to a maximum 80% LTV and £1.5m, with rates starting from 4.84%. Purchases are allowed off-plan, subject to reinspection before completion, evidence of an appropriate new build warranty or certificate is required, and a maximum of 5% new-build incentives (including builder’s deposit) is allowed.
See you next time, when we’ll hopefully see even more positive enhancements to help drive the market forward.
