While much of the market is starting to settle into the Christmas lull BM has announced a number of important changes that all brokers should be aware of.
The lender announced that from 24 November it would be increasing the maximum LTV for buy-to-let mortgages on new-build properties to 75% and also introduced a number of amendments to its lending policy.
From now on it will consider affordability using income for some applicants and as such will require brokers to retain evidence of income and source of deposit for all applications. It will ask for evidence of personal income and deposit for some applicants and will update its Property Portfolio Form, renaming it the Customer Profile Form instead.
It will make let to buy available only when the applicant is buying a residential property and will require evidence of the residential property purchase for let to buy mortgages. It will also update requirements for deposit verification for gifted deposits.
While there is no doubt the lender is being more careful when it comes to affordability and placing a greater emphasis on due diligence, what really stands out from these changes is its decision to increase its LTV on buy-to-let mortgages for new builds.
As we are all aware, the new-build sector was hurt more than most during the credit crunch as lenders deemed such properties too big a risk and shied away from them.
The fact that one of the biggest lenders in the buy-to-let arena is willing to increase its LTVs for mortgages on these properties is a huge vote of confidence for the sector.
By implementing more stringent criteria on let to buy, BM shows it is recognising the growing popularity of the product. And fellow buy-to-let heavyweight The Mortgage Works is doing the same. TMW has announced its offers for let to buy applications are now valid for six months.
Ying Tan, managing director, Buy to Let Club (part of The Buy to Let Business)