Gatehouse Bank is opening up its range of buy-to-let (BTL) products to first-time buyers as well as first-time landlords.
The bank has also widened its eligibility criteria for both BTL and home purchase plan (HPP) customers.
Gatehouse has revamped its manual underwriting processes to improve access for contractors on a case-by-case basis by taking their full employment income into account too., as well as improved its criteria for expat and international contractors.
The maximum term for BTL products for UK expats and international residents has been increased from 15 years to 25 years on a rent only basis, in line with its acquisition and rent term.
Additionally, the bank has reduced the minimum property value for houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUFBs) for UK residents from £75,000 to £55,000.
HPP changes
HPP mortgages are Shariah-compliant alternatives to traditional mortgages and carry no early repayment charges.
Gatehouse has improved the eligibility criteria for its HPP customers so the bonuses, overtime, and housing allowances of all workers are now considered.
The income evidence for people on fixed-term contracts and temporary workers has also been changed and the minimum property value for UK expats using HPPs has decreased from £100,000 to £95,000.
The bank will now consider applications from UK nationals and residents in the UK with six months continuous employment in the UK, down from 12 months.
Charles Haresnape (pictured), CEO of Gatehouse Bank, said: “We are continually reviewing every aspect of our BTL and HPP ranges, from the rates through to the small print.
“We will continue to expand the audience for our products and endeavour to better serve those customers who find it difficult to access finance elsewhere.”
Skipton increases borrowing for BTL with criteria change
Elsewhere, Skipton International has announced an enhancement to its mortgage criteria.
The change will allow overseas resident BTL investors to potentially achieve greater levels of borrowing against their rental yields.
A reduced interest coverage ratio of 110 per cent (compared to the standard 125 per cent) will be offered to customers earning over £100,000 per annum and looking to borrow over £500,000.
Roger Hughes, Skipton International’s business development manager, said: “We are always looking at opportunities to develop our mortgage proposition and make it more attractive.
“This change will allow high net worth individuals to borrow more funds to either purchase a new property or remortgage an existing one.”
Virgin amends stress test
Finally, Virgin Money has announced changes to stress test rates when assessing affordability for BTL mortgages.
The interest stress test rate is being reduced from five per cent to 4.5 per cent on fixed rates products of five years or longer.
The required rental cover remains at 145 per cent.
Interest stress test rates on BTL remortgages – where there’s no additional borrowing – has changed from 5.5 per cent to five per cent at 125 per cent of rental income.
Sarah Green, director of intermediary mortgages at Virgin Money, said: “In line with the market, we are offering reduced stress test rates across several of our products.
“This demonstrates our ongoing commitment to supporting our intermediary partners and the buy to let market.”
