Complex Buy To Let
More than 85 per cent of BTL lenders remain in market
More than 85 per cent of buy-to-let lenders that were active at the beginning of March remain in the market but product choice is restricted, analysis from Mortgages for Business shows.
Of the 49 buy-to-let lenders operating in March, seven, or 14 per cent, have stopped lending.
HSBC was one of the latest banks to withdraw from the market. Earlier temporary departures came from Together and Vida Homeloans.
However, Santander, Clydesdale, Precise and Kent Reliance have all returned after exiting shortly after the government’s lockdown measures were announced.
Saffron Building Society withdrew from the market before the outbreak in March, for non Covid-19 reasons, indicating its intention to return to market later in the year.
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LTVs reduced
Product choice in some areas of the buy-to-let market has been severely disrupted. There are currently no lenders offering deals at 85 per cent loan to value (LTV), down from three in March.
The number of lenders serving houses in multiple occupation (HMO) and student landlords has fallen by 44 per cent and 30 per cent respectively.
Lenders offering buy-to-let tracker mortgages have fallen by 43 per cent from 28 to 16 between March and April.
Portfolio and first-time landlords remain well served with 33 and 35 lenders respectively still offering deals in these markets.
Steve Olejnik, managing director of Mortgages for Business, said: “Lots of lenders have cut down the sorts of landlords that they will lend to. They’re pulling product ranges, tightening lending criteria, and increasing margins.
“But different lenders are de-risking against different kinds of landlord borrowers. So, while some lenders are no longer lending to first-time landlords, there are still lenders who are.
“A huge number of 80 per cent LTV five-year fixed rate BTL products have been pulled from the market – about 90 per cent of them. But not all. A good broker will be able to find you a competitive deal because those deals are still out there, for now.”
Olejnik added that even lenders that require a physical valuation at a higher LTVs are generally proceeding with landlords’ remortgage applications but moving the valuation part of the application to the end of the process.