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Summer is here in BTL, let’s make hay while the sun shines – Ying Tan

by: Ying Tan, founder and chief executive of Dynamo
  • 27/07/2020
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Summer is here in BTL, let’s make hay while the sun shines – Ying Tan
Last month was a little bit of a mixed bag for the buy-to-let (BTL) market – in terms of products being pulled, some rate hikes and criteria being tightened.


Not that it was all bad news, far from it, and I did go on to suggest that the more positive end of recent announcements would hopefully continue into the summer months.

I’m happy to say that I was correct in my assessment and we have since seen a flurry of positive product and criteria-related activity.


Holiday lets

As it’s summer, let’s start with the re-emergence of holiday and short-term lets following the relaxation of lockdown restrictions to allow holiday stays in the UK.

Teachers for Intermediaries has launched two fixed-rate holiday let mortgage products. These include a three-year fix at 3.49 per cent up to 75 per cent loan-to-value (LTV) and a five-year fix at 3.74 per cent up to 75 per cent LTV.

Both products have a £99 application fee and a £899 arrangement fee.

YBS Commercial Mortgages announced a limited company buy-to-let product targeted specifically at holiday lets in prime UK tourist locations.

The product, which is focussed on the South Coast, South West, Wales and the Lake District, offers a five-year fixed rate at 3.85 per cent for loans up to 75 per cent LTV with a maximum loan amount of £1m.

Leeds Building Society has introduced a pair of two-year fixes at 2.84 per cent up to 60 per cent LTV and at 3.34 per cent up to 70 per cent LTV.

Both products come with a free standard valuation, fees assisted legal services, and no product fee.


LTVs and loan sizes rise

Earlier in the month, Foundation Home Loans returned its BTL product range to its pre-lockdown structure with the reintroduction of large loan, early remortgage and short-term let products.

Hampshire Trust Bank (HTB) has also just recommenced lending on holiday lets and announced that it has increased its maximum LTV to 75 per cent for all loan sizes up to £15m.

HTB has also reduced minimum interest cover ratios (ICRs) to pre-Covid-19 levels for all deals.

Staying on LTVs, Landbay has increased its maximum LTV to 75 per cent on small houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUFBs), up from 70 per cent previously.

The lender has raised its maximum loan sizes from £1m to £1.5m on all standard properties, HMOs and MUFBs.

It has also increased the maximum loan size on new-build properties to £750,000 up from £500,000 across its whole range.


Pepper returns

Finally, Pepper Money has relaunched buy-to-let purchase mortgages for individual investors and limited companies.

The lender will also be making its new Pepper Light mortgage range available on BTL purchases for the first time.

As well as relaunching into the BTL purchase market, Pepper Money has extended its offer validity to 90 days. This was reduced to 60 days earlier in the lockdown, but the improving outlook has enabled Pepper Money to reinstate the longer offer period.

It’s great to be able to finally talk about the BTL sector with some sense of normality.

We are now in a position to really help clients look forward and focus on the opportunities which will continue to present themselves over the summer months.

So, let’s make hay while the sun shines.


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