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Lenders refocus on criteria as Stamp Duty deadline passes – Ying Tan’s Market Monitor

by: Ying Tan, managing director, Buy to Let Club
  • 28/04/2016
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Lenders refocus on criteria as Stamp Duty deadline passes – Ying Tan’s Market Monitor
Well, 1 April has been and gone and the buy-to-let market is resuming some sort of normality.

The Stamp Duty hike for buy-to-let properties did, as expected, result in a surge in lending on the run up to the deadline as well as, it seems, a boost in property prices. Now we’re in the predicted ‘slump’ (although steady growth is expected to make a return fairly soon), but there’s still plenty of developments afoot.

Keystone made intentions of making a name for itself in the wider market clear when it announced it would be dropping the Buy to Let Mortgages element of its name, to become Keystone Property Finance. The lender says it will be introducing products for commercial investors and business owner-occupiers.

Since David Whittaker resurrected Keystone in 2012, the lender has become an exciting name in the market, particularly for professional landlords who have been somewhat neglected elsewhere, and I’m sure plans to broaden its offering will prove just as successful.

With the Stamp Duty hike deadline now over, lenders seem to have turned their attention back to their product ranges, with a number of criteria changes taking place.

Metro Bank has increased the number of properties it will allow to be held from 6 to 15, although no more than 10 can be mortgaged with the lender. Its maximum age at the end of the mortgage term is now 80 years old and the minimum property value the lender will accept has been reduced to £100,000. It has also reduced its product fees across its entire buy-to-let range.

Interestingly, Metro Bank has also announced it will now accept top slicing from earned income to support buy-to-let. Applicants must have a minimum income of £75,000.

With costs rising in the buy-to-let industry thanks to external factors, it’s good to see lenders responding to the needs of investors and enhancing their criteria in this way. It’s a move I expect most lenders to follow. Indeed, Barclays announced earlier this month that any surplus disposable income can be used to supplement a shortfall in rental income, where the 135% rental cover ratio is not met.

Meanwhile there was good news from Santander which announced it would be reducing selected two-year fixed buy-to-let rates by up to 0.30%. Those products affected include the 60% LTV two-year fixed 1.99% with £1,995 booking fee; 60% LTV two-year fixed 1.89% with 1.5% booking fee; 75% LTV two-year fixed 2.49% with £1,995 booking fee; and the 75% LTV two-year fixed 2.29% with 1.5% booking fee. All are available as purchase and remortgage options.

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