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Countdown until the MCD – Ying Tan’s Buy-To-Let Marketwatch

by: Ying Tan
  • 21/04/2015
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Countdown until the MCD – Ying Tan’s Buy-To-Let Marketwatch
As the phrase ‘one year on from MMR’ starts to fade away, it is being replaced with ‘one year until the MCD’.

Yes, April 2016 will see the implementation of the Mortgage Credit Directive, bringing with it some repercussions for the buy-to-let market.

This month saw the Council of Mortgage Lenders (CML) publish its statement of practice for members ahead of the regulation changes. Among other things this included ensuring their advertising is fair and doesn’t mislead customers, adhering to written policies when it comes to complaints, assessing affordability and handling arears.

Given that most lenders currently operate in this way I’m not sure how necessary it was, but it was a good move all the same.

Elsewhere, Foundation Home Loans (FHL) announced that it would accept CCJs and defaults provided they are up to date at the time of application. The new lender also says it will accept applications from borrowers who do not own their own home as long as they have held at least one other buy-to-let property for at least 24 months.

Furthermore, FHL says it will accept deposits that have been gifted from family with no limits (the total deposit can come from family) and when assessing affordability income can come from any source – taxable or not.

Woolwich, Nationwide and BM Solutions all announced they were changing their income proof requirements, with Nationwide scrapping its much criticised requirement for a cover letter from HMRC for self-employed income verification.

Meanwhile, there was good news for us as we launched the lowest market-leading rate at 75% loan-to-value exclusively through Buy to Let Club. The two-year fix has a rate of 2.59% and a £1,995 arrangement fee. It offers free valuation and cashback of £250 (on remortgages only).

Santander for some time now has been leading the pack chasing the likes of TMW and BM Solutions for buy-to-let market share. Various criteria changes, including most recently allowing remortgaging with capital raising for personal use up to 75%, have earned it plenty of praise.

And with market-leading rates this only further proves how far the lender has come in the buy-to-let arena. I’m excited to see what else it has in store for the market.

Ying Tan is managing director, Buy to Let Club (part of The Buy to Let Business)

For more on the buy to let market, join Mortgage Solutions at the Buy to Let Market Forum running from 22 to 29 April in Cardiff, Birmingham, Winchester and Warrington.

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