The lender entered the buy-to-let market on a limited distribution basis in August and is now open to all brokers who want to register.
Following a trial period, its product will be available to all intermediaries in England and Wales and is open to landlords and investors.
The offering has an interest coverage ratio (ICR) from 125 per cent and MT Finance will accept a minimum unit size of 28 sqm. It will consider limited company borrowers, first-time buyers, first-time landlords and people with adverse credit.
It will lend to expats up to 65 per cent loan to value (LTV). Residential and semi-commercial properties will be permitted, as will holiday lets with an assured shorthold tenancy (AST) income.
MT Finance will lend against ex-local authority properties up to 70 per cent LTV, including those with balcony and deck access subject to a valuation.
Joshua Elash, founding director at MT Finance, said: “We are excited to roll out our buy-to-let proposition to the wider intermediary market, enabling us to continue developing our core objective of being an environmental, social, and corporate governance (ESG) focused, multi-solution, financial institution.
“Brokers know they can rely on us as we have an extensive track record of delivering certainty of funding efficiently and in this market, where volatility is all too common, that is more important than ever.”
Baptism by fire
Marylen Edwards (pictured), head of lending buy-to-let at MT Finance, said lessons were learned from being thrust into a state of market turbulence.
During the limited distribution phase, MT Finance was offering a five-year fixed rate of 4.99 per cent – pricing which today would be considered market-leading.
Edwards said rates had already risen slightly by the time MT Finance trialled its buy-to-let proposition, and what it has on offer now is not too dissimilar if not “a little bit higher”.
“That was a lot easier for landlords to transact at than the six and seven per cent rates we saw,” she added.
MT Finance started off “really strong” and launched with existing partners who already sold the lender’s bridging products.
“We saw a good six weeks of momentum and the business was growing better than we expected it to. Then we had the infamous mini-Budget which put a hold on everything, and rates went up quicker than anticipated,” Edwards said.
That resulted in a quiet October to December, but Edwards said it allowed MT Finance to underwrite and complete the business it had generated.
“We didn’t renege on any offers. We honoured everything. Clients had no issues, no worries. We still did the odd case even at much higher rates.
“Internally, we were all organised and sorted for the new year,” she added.
Edwards said since January, the lender has been getting busier on a weekly basis.
She said once swap rates started to stabilise and borrowers became comfortable, things started to move.
No need for BTL concern
With 30 years of experience in the industry, Edwards said the sector would always be resilient.
While various polls and studies have shown both confidence and discontent in the buy-to-let sector, Edwards said it was mostly longstanding landlords who would “look for other ways to do deals”.
She said: “The more experienced landlords will have unencumbered or lowly-geared property sitting in their portfolios and will just start utilising those. Especially now there are more specialist lenders. Where they might not have been able to mortgage them in the past, the market’s more flexible now.
“I think it’s been hardest for the newer landlords, those who have been in the sector for 10 years or less because they have run their portfolios on low rates gearing to the 75 per cent LTV maximum. Now suddenly they’re going from rates in the threes and the fours to the fives and sixes. They don’t always have enough equity to release capital and they still need to do EPC works.”
Edwards said amateur landlords were “the ones that are having to reflect on whether this is right for them, the longstanding ones are getting on with it.”
Going forward Edwards said landlords may see opportunities to maximise their income by converting properties into houses in multiple occupation (HMO) to increase rent.
A reliable lender
Edwards said while MT Finance may not be the cheapest on rate, its bridging DNA mirrored its buy-to-let offering and gave borrowers “speed of service, quick turnarounds and the added human touch”.
“We will apply common sense where we can. If there is a way to make a deal work, we will look to do that for the client,” she added.
“People don’t necessarily want the cheapest rate if it’s going to take three months to complete. We’ll give them the ability to pick up the phone and say, ‘I’ve only got four weeks to do this, can you help?’. Then we can prioritise that client and assist where we can.”
She said there could also be the opportunity to align the lender’s bridging and buy-to-let offerings in the future.
Having worked both in the lender and broker sides of the market, Edwards hopes to bring a common understanding between the two.
“It’s about being clear and transparent, saying yes or no without prolonging answers,” she added.
MT Finance aims to continue to “grow the business. We’ve got a good criteria base which will be ever evolving because we’re still new to market. Between ourselves and our funders, it’s regularly being reviewed.”
Edwards added: “What we have now will probably not be what we’ll have in a couple of years’ time. It will evolve as we grow.
“But we have a good solid foundation to sit nicely within the specialist space. We have a few niche USPs, as we expand the proposition and go whole of market, the business will just naturally grow in the way we want it to.”
She said she wanted MT Finance to be a lender that brokers approached because they wanted to and said word of mouth would build its reputation.
