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Lenders’ continued rate slashing keeps buy-to-let profitability buoyant – Ying Tan

by: Ying Tan, managing director of Buy to Let Club
  • 18/07/2018
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Lenders’ continued rate slashing keeps buy-to-let profitability buoyant – Ying Tan
Latest research from Pantheon Macroeconomics will have made for interesting reading for anyone involved in buy to let.


According to the economist, buy to let is actually more profitable now than it was two years ago, despite the changes in the industry of late.

This, says the economist, is largely down to the reduction in rates we’ve seen across the industry.

A reduction that is continuing if this month’s product updates are anything to go by.


Slashing rates

Santander is the latest lender to slash rates, reducing selected buy-to-let fixed rate products.

Selected two-year fixed rates have been reduced by 0.10% while some five-year fixed rates are reduced by 0.15%.

Kensington Mortgages has also reduced rates as part of a number of changes to its buy-to-let ranges.

Rates have been reduced by up to 0.45%, with rates now starting from 2.69%.

The enhancements also include new zero fee and free valuations products, with limited company options available on all products with no additional rate loading.

Elsewhere, Precise Mortgages has launched a new limited edition range of five-year fixed products featuring a reduction in both rate and fee compared to its standard buy-to-let mortgages range.

The new range is available for individuals, houses in multiple occupation (HMOs) and limited companies at up to 75% LTV and is suitable for loans above £300,000.



Meanwhile, Kent Reliance has launched its new income-backed buy-to-let proposition, aimed specifically towards non-portfolio landlords (those with up to four properties) applying in their personal name or via a limited company.

The lender says the underwriting process will now take a broader view of customer affordability through earned income to supplement the interest coverage ratio (ICR) for buy-to-let loans where the rental property yield itself does not meet minimum requirements.

And Interbay Commercial has revealed it is reducing the documentation required for portfolio landlord applications.

It says the changes are designed to simplify and speed up applications for portfolio landlords, aiming to provide a more streamlined process overall.

A cash flow form is no longer required as key questions in relation to customers’ cash flow will now be included within the business plan document.

The shareholding question will be removed from the assets and liabilities statement, and tax liability has now been renamed ‘Tax Paid from Property Portfolio’ to “provide additional clarity.”


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