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BTL market volatility will mean challenging weeks ahead – Ying Tan

by: Ying Tan, founder and chief executive of Dynamo
  • 30/03/2020
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BTL market volatility will mean challenging weeks ahead – Ying Tan
We’ve seen the government and lenders announce a string of individual measures to help support a range of residential and buy-to-let borrowers during the Covid-19 outbreak.


We are operating within such a fluid and ever-changing world that it’s not easy to keep track of everything going on around us.

To highlight this, Knowledge Bank reportedly received 926 criteria updates from 91 lenders in the 48 hours after the government announced that all homeowners who need it can take a three-month mortgage payment holiday.

With that in mind, for the moment, I will steer clear of strictly product-related announcements as these are quickly becoming dated as the market is moving so quickly.


Market upheaval

However, we can’t ignore the number of lenders who are pulling products and cutting the maximum loan to values (LTVs) they will accept on residential and buy-to-let mortgage applications as surveyors continue to face restrictions on physical property inspections.

This move is indicative of the ongoing volatility, limited access to capital market funding and logistical reasons as lenders are forced to restructure operations to keep employees safe and find the most effective ways to continue servicing existing cases and support new transactions where possible.

As such, we are seeing product withdrawals and repricing take place on a daily basis and this reaffirms how important it is for intermediaries to have a relationship in place with a BTL specialist if they don’t already do so.


Some positivity around

On a much more positive note, LendInvest recently completed its second securitisation of buy-to-let mortgages in an oversubscribed transaction entitled Mortimer BTL 2020-1.

Despite significant market turbulence from the global spread of the coronavirus, it took LendInvest six business days to price the transaction after opening investor discussions.

Gatehouse Bank has widened the eligibility criteria on its range of buy-to-let products. Changes include an increase to the maximum age at the end of the term, from 85 to 99 years for UK residents.

The 99-year age limit will not apply to customers who rely on non-rental income to meet affordability criteria. Where there is a reliance on personal income, the maximum age remains 85.

Gatehouse will also now allow refinancing within six months of purchase for all buy-to-let customers. Buy-to-let products for expats and international residents have also been amended, with the maximum finance-to-value increasing from 75 per cent to 80 per cent.


Stick together

Finally, Landbay has made improvements to its application process with the introduction of an instant decision in principle (DIP) which uses technology in line with the whole paperless application process.

And – back in line with where we began – the lender is also said to be refreshing its product range due to a change in the recent cost of funds.

The last few weeks and the upcoming weeks will prove to be a challenging time for us all, and it’s important that we stay positive, stick together and support each other where we can in order to get through this period and hopefully start to see some light at the end of the tunnel.




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