Let’s start with a host of positive shifts from mutuals who continue to deliver a range of innovative solutions to meet ever-changing landlord needs in what remains a buoyant BTL marketplace.
The Nottingham introduced a series of criteria changes including lower interest cover ratio (ICR) figures and reduced calculation rates for standard BTL and limited company applications, together with the removal of a required minimum income.
The lender also raised the maximum loan to value (LTV) for lending on flats to 75 per cent (was 65 per cent), removed all Covid-related criteria and withdrew the requirement to see last month’s personal and business bank statements as standard.
Mansfield Building Society updated its BTL criteria to include an increase in its maximum LTV from 75 per cent to 80 per cent on selected products. The mutual also reduced the minimum age for applicants to 21 and can now accept first-time landlords. If the applicant is not a first-time landlord, the Mansfield can now also accept gifted deposits.
Newcastle Intermediaries removed the minimum income criteria on its BTL mortgage products in an effort to broaden its appeal to landlords who have lower or non-traditional incomes.
Borrowers no longer need to meet the £25,000 per annum (£30,000 joint) minimum income requirement on Newcastle Intermediaries’ BTL mortgage products, with affordability instead being assessed on the ICR. Borrowers must be in receipt of an employed, self-employed or pension income.
Leeds Building Society lessened its stress rate on BTL fixed rate deals for five years or more. The stress rate has been reduced from 5.5 per cent to 4.5 per cent for BTL purchase or remortgage with additional borrowing on longer term fixed rate mortgages.
Specialist lending moves
From a specialist lending standpoint, West One Loans announced a reduction on the rates of its BTL lifetime tracker range.
Its Lifetime Tracker Standard W1 is now available at base rate plus 2.09 per cent, previously base rate plus 2.24 per cent. It has also reduced the rate on its Lifetime Tracker Specialist W1 product range with rates now starting at base rate plus 2.34 per cent, down from the previous rate of base plus 2.49 per cent.
Aldermore launched BTL products for individual landlords and company landlords with single residential investment properties, multi-property individuals and company landlords, houses in multiple occupation (HMO), and multi-unit freeholds.
For individual landlords with single residential investment properties, borrowers can access a two-year fixed rate at 75 per cent LTV at 3.48 per cent. This is the same rate for company landlords and is subject to a 1.5 per cent product fee. For HMO and multi-unit freeholds, its two-year fixed rate at 75 per cent LTV stands at 3.98 per cent. It also comes with a 1.5 per cent product fee.
Last but not least, Shawbrook is now offering new BTL mortgage customers with energy efficient properties a discount, or partial refund, of up to 60 basis points on their arrangement fee. New customers will be able to obtain the Energy Efficiency Discount on their arrangement fee when an EPC is produced confirming the property’s rating of ‘C’ or above.
For new mortgages on properties where the EPC rating improves to at least a ‘C’ during the mortgage term, customers can apply for a partial refund of their arrangement fee, plus the cost of the new certificate (up to £100).
This reflects a busy month for building societies and specialist lenders and I’m sure there is more to come over the summer months.