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No summer slowdown for BTL market – Ying Tan

by: Ying Tan, managing director of Buy to Let Club
  • 05/06/2017
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No summer slowdown for BTL market – Ying Tan
Time flies when you’re knee-deep in election coverage, political debate and endless rhetoric, but, June 8th is nearly upon us.

That means it’s almost time for us to take a break from the polls for at least a couple of months (let’s hope), and summer is on its way.

So is the market winding down for the traditional slowdown? Most certainly not.


Coventry’s ICR

There was good news from Coventry for Intermediaries which announced it was keeping things simple amid Prudential Regulation Authority rules and regulation changes.

The lender said its clear and straightforward interest cover ratio (ICR) policy recognises that one size doesn’t fit all.

If the total gross income of all applicants is less than £40,000, the ICR is 125%. If the total gross income of any applicant is £40,000 or more, the ICR is 140%.

An ICR of 140% will be used if any applicant indicates on the application they are a higher or additional rate taxpayer.

In all cases a reference rate of 5.5% will be applied, or 5% if it’s a fixed rate of five years or longer.

The lender has also removed its minimum income and minimum time in employment criteria which is good news.


Product and rate launches

Leeds announced the launch of a new fee-free 60% loan to value (LTV) range as well as 0.10% reductions on selected two and five-year fixes.

There was a product launch from The Nottingham too which unveiled a new two-year fix at 2.99% as well as a rate reduction on its two-year discount product to 2.59%.

And Pepper Homeloans announced the launch of a new near prime five-year fix with a rate of 2.98%. Available to 75% LTV, the product has a rental calculation of 140% at pay rate and a completion fee of 1.75%.

Finally, Axis proved it was ready to grab a bigger market share by reducing rates on a number of its fixed rate products and launching several limited edition products at 65% LTV.

The lender’s three-year products, both standard and specialist, have been reduced by 11 basis points while its five-year products have seen reductions of 27 basis points and a new 65% limited edition specialist product has been added to the range.

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