Finance & Tax Opinion

Buy to Let Market Update

Licensing
Doug Hall
Written by Doug Hall

Welcome to ‘Buy to Let Market’, a new column aimed at providing you with recent criteria and product updates within the buy-to-let lending markets.

New rules have been introduced by the Prudential Regulatory Authority (PRA) which governs the way in which mortgage lenders assess buy-to-let mortgages applications.

Lenders assess buy-to-let mortgage applications from landlords who own four or more mortgaged properties as portfolio landlords. The PRA requires lenders to take a comprehensive view of a portfolio landlord’s financial position when all of their business dealings are taken into consideration.

This means you will need to provide lenders with detailed information about all of your properties, business and income and expenditure. If you own four or more mortgaged properties, or if you own three mortgaged properties and financing the purchase of an additional property, you will have to provide the following information:

  • A schedule showing all the individual properties which make up your total portfolio
  • A statement of your assets and liabilities
  • A cashflow forecast
  • A business plan

To make this task easier, you can download generic document templates from the Resource Centre on the RLA mortgages website

 

Buy to Let Market Update: –

Coventry/Godiva – has repriced various products to include their Flexx for Term range. The Flexx for term range has no early repayment charges from day one with rates starting from 1.85%

Foundation Homeloans – has launched new products at 80% loan to value on its standard and first-time landlord ranges. Rates start from 3.95% with minimum rental requirements based on the pay rate and not a notional rate for the five-year fixed rate options.

Landbay – has increased its loan size to £1,000,000 and also increased the maximum overall lending with them to £2,500,000 with no limit on the number of properties with them and no limit on the number of properties with other lenders. Their maximum mortgage term has increased from 10 to 25 years.

Aldermore – has launched a Limited Edition, five-year fixed rate, fee free, buy-to-let remortgage only range with rates starting from just 3.48%. This product is available to 75% loan to value and there is also an 80% loan to value product available.

Precise Mortgages – has launched a 3mc exclusive for HMO’s (Houses in Multiple Occupation) for both individual and Limited Company applications. The rate is fixed at 3.49% for two years with a lender product fee of £995 for loans up to £500,000. The product is available up to 75% loan to value for both remortgages and purchases.

Axis Bank – will now include Airbnb within its holiday let criteria (assessed on what a standard AST would achieve) in areas deemed as holiday lets. It is also piloting Airbnb in London with the view to extending to other selective city locations at some point during the first half of next year.

Kent Reliance – has improved its buy to let criteria for Ex Patriates to include reduced rates and have also launched new fixed rates. Products are available for HMO and Limited Company loans with no regional restrictions. Australian Expats are now considered where the property is held in a UK based Limited Company.

Paragon Mortgages – has introduced a forward funding facility whereby a portfolio landlord can agree a funding facility for their next six months requirements for all purchase and remortgage applications. The facility will reduce the level of paperwork required during the forward funding facility period.

The Mortgage Works (TMW) – has re-entered the limited company Buy to Let market with a pilot phase until launched to the wider market.

For further information on buy-to-let mortgages both for individuals and limited companies please contact RLA Mortgages on 0844 858 4420 or visit the website www.rlamortgages.co.uk.

Please note lenders have different minimum criteria requirements and not all landlords and property types will qualify for a specific product. The product rates are correct at the time of writing the article and are subject to change.
This is a financial promotion and in no way should it be viewed as a personal recommendation or advice. Before a recommendation/advice can be given, you should seek independent mortgage or financial advice. RLA Mortgages is operated exclusively for The Residential Landlords Association (RLA) by 3mc, which is authorised and regulated by the Financial Conduct Authority. FCA No. 302992. The Residential Landlords Association is an Introducer Appointed Representative of 3mc (UK) Limited.

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Although the FCA regulates the way the majority of mortgages are sold, in most cases it does not regulate buy to let mortgages. This means you may have less protection if things go wrong with a buy-to-let mortgage.

About the author

Doug Hall

Doug Hall

Doug Hall is a director of 3mc; a specialist mortgage provider within the buy-to-let sector. 3mc have been established for over 21 years working with lenders, mortgage intermediaries and the Residential Landlords Association (RLA) providing all types of buy-to-let mortgage solutions.

2 Comments

  • The article is incorrect. It states that portfolio landlords must now provide business plans and other documentation when applying for a new Buy To Let mortgage.

    Whilst this is true fir some lenders, not all lenders require this.

    • Thank you for your feedback David. The article has been written within the spirit of the new underwriting requirements for portfolio landlords. 3mc (RLA Mortgages) works with all types of landlords including portfolio landlords. We are encouraging portfolio landlord clients to complete all of the new forms which will then enable the client to work with all lenders supporting portfolio landlords with the minimum of inconvenience to themselves when moving between lenders or for future purchases and/or remortgages. If you are a landlord and would like any guidance on the new rules then please feel free to contact RLA Mortgages on 0161 341 0581

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