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Lenders are stepping up for BTL landlords in the absence of government support – Armstrong

Last month, I commented on the positive start to the year, and it has been good to see this sentiment continuing in February.

Swap rate fluctuations have caused a slight upward shift in rates, but hope certainly remains high for a favourable year. That said, Wednesday’s Spring Budget is looming and we’ll have to wait and see what impact, if any, this has on the buy-to-let (BTL) and specialist markets. It’s looking unlikely that there will be much to support landlords, but let’s not write it off just yet.

In the meantime, let’s focus on some of the updates from a wide variety of lenders in the last few weeks.

Hampshire Trust Bank (HTB) launched a tracker product with flexibility built in, aimed at investors and developers who want to be able to move with their local market. Available as a limited-edition, two-year discounted tracker across HTB’s BTL and semi-commercial propositions, Flex gives the benefits of a tracker mortgage, but with the ability to sell the property or lock into a fixed term with HTB within the two-year discount period without incurring early repayment charges (ERCs).

The tracker is available up to 75 per cent loan to value (LTV) and BTL rates start from 7.8 per cent for Fee Plus. Rates start from eight per cent for semi-commercial. 

Paragon launched limited-edition, five-year fixed products. Available up to 65 per cent LTV, the range starts from 4.65 per cent with both five per cent and no-product-fee options. The products come with free mortgage valuations, no application fees and can be used for either purchase or remortgage. 

Earlier this month, Paragon also launched a pair of two-year fixed rate products that are both sub-four per cent. Offered up to 70 per cent LTV for single self-contained properties, prices start from 3.94 per cent for properties with an EPC rating of A to C and from 3.99 per cent for lower-rated properties. 

Foundation Home Loans (FHL) announced new fee-assisted products for standard houses of multiple occupancy (HMOs). Rates start from 6.39 per cent for the F2 two- and five-year fixed rates, which are available up to 75 per cent LTV with a 1.25 per cent fee and no application fee. One free standard valuation is also included, which, for properties of this type, should represent a considerable saving.

FHL has also refreshed selected F1 and F2 products. Five-year fixed green rates now start from 5.99 per cent at 75 per cent LTV, while F1 two- and five-year fixed rates now start from 5.94 per cent. 

Kent Reliance for Intermediaries will now accept investment valuations on five- and six-bedroom adapted HMOs, provided the property is located within an Article 4 Direction area. This change will enable more investors to purchase HMOs with confidence with access to more favourable rates. 

Molo has announced the launch of expat BTL mortgages for British nationals residing abroad in over 70 countries including Hong Kong, Singapore, UAE and across the European Union. One-year fixed rate options start from 4.99 per cent up to 70 per cent LTV and 5.24 per cent up to 80 per cent LTV. Alongside this launch, Molo has adjusted rates for both UK resident and non-UK resident fixed rate products. For UK residents, individual and limited company two-year fixed rates now start from 4.55 per cent for 75 per cent LTV, while five-year fixed rates start at 5.44 per cent for 75 per cent LTV. 


Product and rate adjustments 

United Trust Bank (UTB) has made several rate reductions. All two, three, four and five per cent product fee plan options have been reduced by up to 50 basis points. A standard two-year fixed is now available from 4.84 per cent, and a five-year fixed from 5.24 per cent.

Specialist rates for HMOs or multi-unit blocks (MUBs) start from 4.99 per cent for a two-year fixed and 5.39 per cent for a five-year fixed. UTB’s non-standard range for holiday lets offers rates from 6.97 per cent for a two-year fixed and from 7.20 per cent for a five-year fixed. 

West One has made changes to its limited-edition, first charge BTL product range. This includes a re-introduction of a selection of two-year fixed rate products. Two-year fixed W1 standard products are priced at 3.96 per cent with a seven per cent arrangement fee, while specialist non-portfolio products start from 4.83 per cent. 

Interbay announced reductions across its semi-commercial products of up to 40 basis points, introducing new LTV options and simplifying loan size bandings. The reductions have been applied across the existing whole of market and Select ranges where there is now an additional 65 per cent LTV option. The loan bandings in the Select range are now £150,000 to £1m and £1m+. 

Landbay has added zero per cent fee options to its five-year standard and five-year automated valuation model (AVM) standard products to enhance flexibility and affordability for clients. The standard product is available at 5.99 per cent up to 75 per cent LTV, and the standard AVM version is available at the same price up to 70 per cent LTV. Both versions feature the zero per cent fee. 

Sticking with this theme, Fleet Mortgages has this month launched new limited-edition 75 per cent LTV five-year fixed products with a £0 fee for standard, limited company and HMO/multi-unit freehold block (MUFB) ranges. Rates for these products are 5.79 per cent for standard and limited company products, while the HMO/MUFB product is priced at 6.19 per cent. 

YBS Commercial Mortgages has announced a reduction in the stress rates applied to its commercial BTL products in a bid to improve affordability calculations for landlords, particularly in those areas where rents are lower relative to property value.

For all five-year fixed rate products, the stress rate is reducing to 125 per cent at pay rate, removing the additional 0.3 per cent that was previously included, subject to applicants remaining within the lender’s 75 per cent LTV criteria.

That’s it for this month – see you on the other side of the Budget. 

Cat Armstrong, mortgage club director at Dynamo for Intermediaries

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