BTL lenders are aiding the market’s revival – Armstrong

After a slightly slower start to the year, it’s been encouraging to see activity picking up in the last couple of weeks, with application volumes now tracking a little ahead of this time last year. 

Buy to let (BTL) continues to adapt, with limited company transactions remaining on the rise. Improving market conditions have helped here, with falling swap rates and some lenders reducing pricing giving landlords a welcome, albeit small, boost in confidence. 

Tenant demand remains strong across most areas, supporting rental yields and ongoing investment. At the same time, landlords are keeping a close eye on the evolving regulatory landscape, particularly around renters’ rights and future energy-efficiency requirements, with many already planning ahead. 

All in all, it’s been a measured start to the year, but improving lender sentiment, strong tenant demand and growing confidence among professional landlords give us lots to be optimistic about. So, let’s dive into some of the lender announcements from the past month. 

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Movements in the BTL market and an anticipated launch 

Fleet Mortgages started the year by introducing a new remortgage product range. The new standard and limited company remortgage products include two- and five-year fixed products up to 75% loan to value (LTV) with a 2% fee (minimum £750) and £500 cashback starting from 4.54%. In the house in multiple occupation (HMO) and multi-unit freehold block (MUFB) range, Fleet has introduced two- and five-year fixed products up to 75% LTV with a 2% fee (minimum £750) and £1,000 cashback starting from 4.84%.

Paragon Bank has expanded its range of BTL bank base rate (BBR) tracker products by adding six new two-year options for purchase or remortgage. These are available up to 75% LTV, with rates starting from 5.1% (equivalent to BBR plus 1.35%) for single self-contained properties. 

HMO/MUB products are available from 5.45% (BBR plus 1.7%). The new products feature three fee options (0.75%, 1% and 1.5%) and free valuations. 

CHL Mortgages has announced a collection of 10 limited-edition, free-valuation HMO and MUFB products for landlords looking to invest in properties with up to six bedrooms or units. Featuring rates starting from 2.44% for two-year fixed rates and from 4.54% for five-year fixed rates, products are available up to 75% LTV with a range of fee options: 0%, 2%, 3.5%, 5% and 7%. 

Coventry for Intermediaries has launched a range of products offering lower rates for properties with an Energy Performance Certificate (EPC) rating of A, B or C for BTL and limited company landlords. Available for purchase or remortgage, the property’s EPC rating will be assessed using the official government EPC register (or Predicted Energy Assessment for new builds).

BTL purchase rates start from 3.97% for a two-year fixed up to 65% LTV. 

Darlington Building Society has increased the maximum LTV across its limited company BTL range from 75% to 80%, reflecting the growing demand from landlords to place their investment properties in a special purpose vehicle (SPV). These enhanced criteria are part of Darlington Building Society’s wider investment over the past year in specialist lending and follow its entry into the limited company market last November. 

Hinckley & Rugby Building Society has launched a limited company BTL discount product for landlords looking for short-term flexibility within a company structure. Priced at 5.4%, the two-year discount is available up to 70% LTV with a £999 completion fee and a £250 application fee.

Zephyr is about to make a range of enhancements to its criteria and products, including now accepting first-time landlords on HMOs and MUFBs, increasing maximum loan sizes, simplifying interest coverage ratio (ICR) rates and launching new special-edition fixed rates.

Watch out for further details to be announced shortly. 

Widened criteria for specialist residential borrowers 

Turning our attention to some specialist residential changes, Precise launched a 40-year term in its residential proposition to continue its focus on making homeownership more affordable. Enabling more manageable monthly payments, this may suit clients with dependants, recent credit events or variable income.

Metro Bank has also strengthened affordability across its residential range. Eligible professional clients can now borrow up to six times income and there is improved access to higher income multiples in the core range. Metro has updated its cost-of-living assessment and lowered the stress rate on two-year fixed products.

April Mortgages updated its criteria to better support secure borrowers aged 50 and over. There is no maximum age at the end of the term for sole applicants and the age cap is now 80 for joint applicants. Retirement income is to be taken seriously, including pension drawdown and investment income. 

And finally, Vida Homeloans has launched Pathway – a new range of high-LTV residential mortgages offering products at 90%, 95% and 97% LTV available with two- or five-year fixed rates. There is a limited-time offer of no assessment fee and many of the products also include cashback options of up to £1,250, payable on completion.