After a tough end to last year, it’s been great to see activity picking up as a result of repricing from a large number of lenders across the market. Inevitably there have been cases where turnaround times have been compromised due to sheer volume of business accepted and we may see some price adjustments made in order to manage the flow, but the general sentiment this month has been one of positivity.
Despite this, we should be under no illusions that we face a turbulent year ahead. We’ve already seen a few fluctuations in swap rates and we can’t ignore the election on the horizon – it certainly makes it difficult to predict what may be round the corner.
However, as I write, there is plenty of choice out there and many reasons to reach out to clients. Let’s take a look at some of the recent updates.
Getting off to a good start
Foundation Home Loans announced the launch of ‘Solutions by Foundation’ this month – a new suite of broad and specialist criteria and products for specialist buy-to-let needs. Their product ranges are now split into three distinct channels – buy to let, residential and solutions – with sales teams changed to align with each. The new solutions range covers multi-occupancy properties, mixed-use properties (part commercial) and expat borrowers.
Other changes by the lender include a widening of its early remortgage criteria to include consideration of cases where the property has been owned for less than six months, plus rate reductions on their buy to let specials. The F1 five-year fixed portfolio-landlord-only products have been reduced by 0.45 per cent with rates now starting from 4.79 per cent with a six per cent fee while the F1 two and five-year fixed products have been reduced by up to 0.5 per cent with a three per cent fee and rates starting from 5.19 per cent.
Paragon started the year by announcing a number of positive changes to its criteria. Its five-year interest coverage ratio (ICR) calculation reference rate has been reduced to five per cent and the maximum loan term has been increased from 25 to 35 years. The minimum experience needed for houses in multiple occupation (HMO) applications is now two years instead of three and they will consider flats in blocks above four storeys.
The Mortgage Works has made reductions for both new and existing customers to offer some of the lowest buy-to-let rates in the market. Rates now start from 3.54 per cent for a two-year fixed product up to 65 per cent loan to value (LTV) with a three per cent fee (purchase and remortgage). The lender introduced a £3,995 fee option for landlords on two-year fixed products. These are available at 3.94 per cent up to 75 per cent LTV also for both purchase and remortgage. Two-year fixes up to 80 per cent LTV with a two per cent fee are down by 120bps, now available at 5.29 per cent while five-year fixes with a three per cent fee available up to 55 per cent LTV are now priced at 3.84 per cent.
Fleet Mortgages was another lender that made sweeping reductions this month. We saw a reduction of 15bps on all fixed rate products across their three core ranges. Rates now start at 4.59 per cent for a standard or limited company five-year fixed up to 70 per cent LTV with a five per cent fee. two-year fixed products are available at 4.89 per cent up to 75 per cent LTV with a three per cent fee in both the standard and limited company ranges.
Molo Finance made reductions of up to 71bps across its range of fixed rates. Two-year fixed rates for both individuals and limited companies now start from 3.94 per cent up to 75 per cent LTV while five-year fixes start at 5.19 per cent. Specialist products for HMOs, MUFBs, holiday lets and new build properties start from 4.04 per cent for a two-year fixed and 5.29 per cent for a five-year fixed. Non-UK residents can access rates starting from 7.54 per cent (capital and interest).
Furness Building Society launched two and five-year fixed holiday let loans. The two-year fixed product is available at 5.99 per cent up to 65 per cent LTV and 6.19 per cent up to 75 per cent LTV, whilst the five-year option is available at 5.93 per cent up to 75 per cent LTV. All products feature a £995 fee that can be paid upfront or added to the mortgage, plus £250 cashback. These products are available on properties across mainland UK.
Landbay reintroduced its five-year fixed up to 70 per cent LTV with a seven per cent fee. The product is priced at 4.29 per cent. The lender has also announced a new standalone range of five-year fixed loans that includes automated valuations and a variable fee structure to increase affordability. Rates for the range start at 4.29 per cent up to 70 per cent LTV and are stressed at pay rate. Maximum property value is £750,000.
New options on the market
In new product announcements, Virgin Money has launched a residential product to assist brokers and their customers who are torn between a two-and five-year fixed. The new ‘Fix and Switch’ product offers five-year security on the interest rate with the benefit of just two years of early repayment charges (ERCs). If interest rates go down, the customer can switch to a better rate after two years without incurring an ERC. The options available are a five-year fixed up to 85 per cent LTV priced at 5.14 per cent and a 90 per cent LTV version priced at 5.27 per cent. Both products benefit from £500 cashback and are exclusively available through registered intermediaries.
Suffolk Building Society has added refurbishment products to assist landlords looking to carry out light refurbishments such as new bathrooms, kitchens and non-structural redecorations. These products use estimated rental income after the work has been carried out, potentially increasing the amount that could be borrowed. Suffolk is offering two-year discount products as well as two and five-year fixed deals with rates starting from 5.79 per cent with a maximum LTV of 80 per cent. Landlords will have six months to complete renovations before the property is advertised to let.
LendInvest has also launched two 85 per cent LTV products in the bridging market: House Flip Bridge and Landlord Refurb Bridge. Both products offer landlords and investors the option to quickly acquire, flip and sell homes with no monitoring on the works being carried out. The minimum loan size for both products is £100,000 and interest is rolled in automatically to be repaid at the end of the loan.
So, lots to get excited about this month across the market with rate reductions, criteria updates and new products. Have those conversations with your clients and let’s keep the New Year momentum going.
