Stable and positive moves for the BTL market in July – Dynamo

Stable and positive moves for the BTL market in July – Dynamo

Although these conditions remain far from benign and we’ve seen plenty of positive moves being made, especially from specialist lenders.  

Foundation Home Loans launched a new buy-to-let limited edition product. Available as part of its F1 product range, the product is available up to 75 per cent loan to value (LTV) with a rate of 4.99 per cent fixed for five years. It also comes with one free valuation, no application fee and a product fee of two per cent. The maximum loan is £1m, and the product is available for both limited company or individual borrowers looking to either remortgage or purchase. 

Landbay introduced its first 10-year fixed rate mortgage range. The new range is for standard properties and small homes in multiple occupancy (HMOs) up to six bedrooms with rates from 4.04 per cent. These products are also available with green options which have reduced rates for properties with an EPC rating of A, B or C. 

CHL Mortgages released a buy-to-let refurbishment product range. This consists of three products: light refurbishment, cosmetic improvement and EPC improvement. The first two products are designed to increase the future asset/rental value of the property, with the latter a green mortgage option which is specifically designed to improve the energy efficiency of the property.  

The range is available to individuals and limited companies and is applicable on standard buy-to-let properties, small HMOs and small multi-unit freehold blocks (MUFBs) with five-year fixed rates starting from 4.41 per cent. 

West One Loans launched a new buy-to-let discount two-year tracker which borrowers can exit at any time without paying a penalty. The product is priced from 3.29 per cent for the first two years, up to 80 per cent loan to value before moving to West One’s reversion rate, which is currently Bank Base Rate plus 4.99 per cent. The lender has also introduced a new range of W1 lifetime tracker products for both standard and specialist applications, with rates starting from 3.64 per cent (BBR +2.39 per cent) with options for a two or five-year early repayment charge (ERC) period. 

Castle Trust Bank revamped its TermTen buy-to-let product to provide certainty with rates. The updated product features a booking fee of 0.07 per cent to ‘lock in’ the current rate. The fee is payable when a credit-backed decision in principle (DIP) has been agreed and will secure the rate for 120 days once the terms have been issued. If the loan completes within this timeframe, the booking fee will be deducted from the arrangement fee at completion. 

 

Building society updates 

Moving into the building society sector, Coventry for Intermediaries reduced selected buy-to-let and portfolio landlord rates by up to 0.25 percentage points and expanded its buy-to-let and portfolio landlord ranges. 

Last but not least, The Nottingham expanded its mortgage offering with the introduction of holiday let lending. Its criteria includes lending on up to two holiday lets (in England or Wales), with no minimum personal income requirement.  

The mutual will also take into consideration up to 32 weeks’ rental yield and allow the owner to utilise the holiday let for personal use for up to 60 days each year. The Nottingham’s new products, all available up to 75 per cent LTV, include a two-year discount with no ERCs and £999 fee (£0 upfront) priced at 3.25 per cent. 

A product push which will help an array of landlords to benefit from even more options over the latter part of the summer. 

CHL Mortgages launches BTL refurbishment range

CHL Mortgages launches BTL refurbishment range

The products also allow borrowers to release the costs of the refurbishment upon completion, without having to change product.

CHL’s refurbishment product range includes three products: light refurbishment, cosmetic improvement and Energy Performance Certificate (EPC) improvement.

The first two products are designed to increase the future asset and rental value of the property, and the latter has a green mortgage option for landlords wanting to improve the energy efficiency of their property.

The range is available to individuals and limited companies and is applicable on standard buy-to-let properties, small houses in multiple occupation (HMO) and small multi-unit freehold blocks (MUFB).

Five-year fixed rates start at 4.41 per cent and lending will be calculated on the pre-works value with a retention held based upon the post-works estimated valuation.

The product range has a maximum 75 per cent loan to value (LTV) pre and post-works. This option means landlords can release more if the value of the property has increased post-works and the maximum cost of work must not exceed 25 per cent of the pre-work property value.

CHL’s light refurbishment product has been designed for works not requiring building regulation sign off and includes works that can be signed off under the Competent Person Scheme.

The EPC improvement product is for landlords looking to improve the energy efficiency of their buy-to-let property to meet the UK Governments’ proposal for existing rented properties to have a minimum EPC rating of C or higher from April 2025

The cosmetic improvement product is for properties requiring cosmetic and minor improvement and repairs works, allowing the landlord to improve the condition of the property.

Refurbishment works must be completed within three months of completion of the initial advance and landlords must supply a detailed schedule of the proposed works at application.

Ross Turrell (pictured), commercial director at CHL Mortgages said: “This product range has been designed and developed in line with feedback received from our intermediary partners and a growing number of their landlord clients who are looking for a product which offers a single, one-stop solution which removes uncertainty around funding refurbishment supported by a simple process.

“This alternative green mortgage product is more than a simple pricing play and provides an additional and viable option to alternative forms of finance such as ‘bridging’ and ‘refurb in term’ solutions whilst helping to reduce administrative burdens and save on multiple inspection and legal fees. Our extensive and highly knowledgeable BDM team will play a key role in supporting our intermediary partners to help them explain the options we can now provide that will make a real difference for their landlord clients.”

Understanding the BTL remortgage opportunities – CHL Mortgages

Understanding the BTL remortgage opportunities – CHL Mortgages

 

Whilst demand remains strong from portfolio landlords who continue to take advantage of some favourable lending conditions, the potential attached to an increasingly buoyant remortgage market is also evident.  

With this in mind, let’s evaluate some data to help establish this potential. Back in February, a webinar poll conducted by CHL Mortgages – held in conjunction with Knowledge Bank based on the specialist BTL lending marketplace – found that 70 per cent of portfolio landlords are expected to remortgage or consolidate loans over the next 12 months.  

When breaking this down, almost half (48 per cent) of broker respondents thought that one to five of their portfolio landlord clients would remortgage or consolidate loans in 2022. Interestingly, 12 per cent highlighted that 20+ of their portfolio landlords clients are likely to remortgage or consolidate loans over the next 12 months. 

When operating in a highly dynamic marketplace, it’s important to maintain some kind of barometer when it comes to the current actions of landlords and the motivations behind them. This is one of the main reasons why we recently commissioned a survey with online broker forum cherryplc.co.uk to help form a better understanding of the current BTL remortgage market.  

This survey generated some enlightening insights including the fact that – despite impending legislation which could see all newly rented properties require an EPC rating of C or above from 2025 – none of the landlords surveyed were in the process of remortgaging with the intention of raising funds to improve EPC ratings on their properties. 

From a purchase perspective, it was encouraging to see that 21 per cent of broker respondents suggested that their landlord clients were looking to raise funds to purchase new properties. 70 per cent were looking to remortgage due to their fixed rate product coming to an end. In addition, six per cent said that landlords were remortgaging due to reduced yields, with three per cent looking to raise funds to convert properties into houses in multiple occupation (HMOs). 

 

Preparing for rising rates 

I appreciate that this is a lot to digest but gaining a more in-depth understanding of the wants and needs of landlords, and of their tenants, is a must for advisers when it comes to being in a position to offer greater levels of holistic advice and provide real value. Value which is ever more apparent in light of rising interest rates.  

We’ve just seen the Bank of England base rate rise to one per cent from 0.75 per cent, its highest level since 2009 and the fourth consecutive increase since December.  

The impact on mortgage rates became evident in the following days and weeks as lenders aligned their pricing accordingly. This means time is of the essence for those landlords who are in a position to remortgage part or all of their portfolios before the next potential increase. 

And the ball still lies firmly in the court of proactive advisers when it comes to helping their landlord clients make the most of these remortgage opportunities in what remains a highly competitive lending landscape. 

Finova adds CHL Mortgages to DA club lending panel

Finova adds CHL Mortgages to DA club lending panel

CHL Mortgages, an intermediary-only specialist buy-to-let lender, relaunched in May 2021 with a product range for large homes of multiple occupancy (HMOs)  and multi-unit freehold blocks (MUFBs) targeting first-time landlords, portfolio landlords and limited companies.

Finova Payment and Mortgage Services is a mortgage club to over 450 brokers and 70 lenders and the inclusion of CHL’s proposition means brokers also have the option to advise on, or refer to a specialist, equity release and secured loan cases.

After relaunching its proposition with a select panel of distributors in May 2021, CHL implemented a phased approach to enlarging its distribution channels to include many of the industry’s leading networks, mortgage clubs and intermediary brands.

Andy Valvona, national account manager, CHL Mortgages said: “It’s now been a full year since we relaunched back into the specialist buy-to-let marketplace and it has been a hugely positive 12 months from both a volume and servicing perspective. It’s also been hugely rewarding to revisit old acquaintances of the brand and to build a host of new relationships.

 “Finova is also a business which has recently reinvented itself after a highly successful rebrand and is really making its mark within the intermediary marketplace. Its focus on empowering members to leverage the latest technology to super-charge their business efficiency, attract new clients and enhance client engagement mirrors our own tech approach and we look forward to forging a successful long-term relationship with Mel and the team.”

Melanie Spencer, head of Finova, said: “We are delighted to be partnering with CHL Mortgages and offering its buy-to-let specialist solutions to our broker network. With buy-to-let mortgage activity surging in 2022, it is crucial that our panel offers landlords competitive and flexible solutions to accommodate all borrowers.

 “This partnership is a welcome addition to our panel of existing lender partners and allows brokers to support landlords with complex borrowing requirements, at a time where the rising cost of living may be stretching household finances.”

 “We look forward to offering our brokers CHL Mortgages’ extensive product range and have no doubt that this will help them support a wider pool of landlords in pursuit of lending opportunities.”

In November last year, the club was rebranded in line with that of its parent firm Finova, which was previously known as DPR Group.

 

 

Zephyr Homeloans brings back seven-year fixed rate deals

Zephyr Homeloans brings back seven-year fixed rate deals

For properties with an Energy Performance Certificate of A to C, the lender will offer a rate of 3.79 per cent up to 65 per cent loan to value (LTV).

For properties that have an EPC rating of D and E the rate stands at 3.89 per cent at the same LTV tier.

Paul Fryers (pictured), managing director at Zephyr Homeloans said: “Amidst the current rising interest rate environment, our seven-year fixed rate products will help support landlords who are looking for ways to create longer-term financial certainty, and in turn potentially pass on a greater level of security to their tenants.”

Zephyr is the latest lender to bring out seven-year deals, along with Fleet Mortgages, West One Loans, Keystone Property Finance and CHL Mortgages.

Recent BTL offerings are still as dynamic as the changing market – Armstrong

Recent BTL offerings are still as dynamic as the changing market – Armstrong

 

This makes for a highly dynamic lending environment which is generating its fair share of opportunities and challenges for a range of landlords.

From a pure product perspective, let’s start this month’s round-up with some new entrants into some interesting areas of the BTL marketplace.

First up, CHL Mortgages entered the short-term let marketplace with the launch of a five-year fixed rate product range, up to 75 per cent loan to value (LTV).

This follows the recent introduction of a new product range by the lender for large Houses in Multiple Occupation (HMO) and multi-unit freehold blocks (MUFB), designed to cater for properties with seven to 10 bedroom or units.

Mansfield Building Society added lending to limited companies and expats to its holiday let offer. In addition to expanding its holiday let borrower types, Mansfield also increased the maximum LTV from 70 per cent to 75 per cent for holiday lets and its maximum loan size to £1mn for BTL.

The new holiday let mortgages, available to both individual landlords and Special Purpose Vehicle (SPV) limited companies, include a two-year discounted rate at 3.59 per cent variable and five-year fixed rate at 4.09 per cent.

Expats needing a holiday let mortgage will also be able to access a two-year discount at 4.19 per cent variable and a five-year fixed rate at 4.69 per cent.

West One Loans became the first lender to introduce a green second charge mortgage for landlords available on properties with an EPC rating between A to C.

The new green product is set at the lender’s lowest ever rate for BTL second mortgages starting from 5.29 per cent. In addition, the lender has created a new, second charge BTL plan called BTL Plus with rates starting at 5.39 per cent.

Fleet Mortgages launched seven-year fixed rates in all three of its core BTL ranges, which are standard, limited company and Limited Liability Partnership, and HMO/MUFB.

Advisers now have access to the new 75 per cent LTV products, available for purchase and remortgage, with standard and limited company/LLP options priced at 3.29 per cent, and HMO/MUFB priced at 3.59 per cent.

The products are available with a minimum loan of £25,001 up to £1mn and come with a rental calculation of 125 per cent at 3.29 per cent for standard and limited company and 125 per cent at 3.59 per cent for HMOs.

 

Product changes

In terms of product changes, Accord Mortgages modified its BTL mortgage offering. The new range includes rate cuts on selected two-year products at 65 per cent LTV of up to 0.09 percentage points.

This includes a two-year fixed rate at 2.51 per cent, it was previously 2.6 per cent, available for remortgaging, which comes with a £495 fee, free remortgage legal service and free standard valuation.

The intermediary-only lender also reduced rates on selected products at 75 per cent LTV for landlords looking for two-year and five-year terms.

These include a five-year fix at 2.49 per cent, formerly 2.55 per cent, available for both house purchase and remortgage. It comes with a £1,995 fee, £250 cashback and free standard valuation.

Market Financial Solutions cut rates across both its BTL mortgage range and bridging loan products. The specialist lender’s BTL mortgage rates now start from 3.29 per cent, down from 3.79 per cent.

Finally, Clydesdale Bank has updated its BTL mortgage range with selected BTL 60 per cent LTV rates increasing by 0.15 percentage points.

This offers a good flavour of the breadth of activity on show across a BTL market which continues to demonstrate its flexible yet complex nature.

CHL launches short-term let mortgage range

CHL launches short-term let mortgage range

There are five-year deals available up to 65 per cent loan to value (LTV). The range includes a rate of 3.5 per cent, with a 2.5 per cent arrangement fee, or a 3.8 per cent rate with a one per cent fee.

Borrowers with smaller deposits can opt for the 75 per cent LTV deals instead, which also come with two fee options. The lower 3.75 per cent rate comes with a two per cent arrangement fee, but they can also opt for a 3.95 per cent rate with a one per cent fee. 

CHL will consider properties intended to be let through Airbnb as a holiday let or serviced apartment. A valuer will however need to confirm that the property could be occupied under an assured shorthold tenancy (AST), that the interest coverage ration calculation fits based on the market rent achievable through an AST, and that the property would be in demand from both owner-occupiers and investors.

CHL’s expansion into short-term let follows its recent introduction of a new product range for large houses in multiple occupancy (HMO) and multi-unit freehold blocks (MUFB)

Ross Turrell (pictured), commercial director at CHL Mortgages, said that following an “exceptional” Q1, the lender is looking to evolve its proposition based on feedback from brokers and demand from landlords.

He said: “When entering any new product area, it’s vital to do so from a solid lending platform. We feel that adding a competitive range of short-term let products will deliver further options and opportunities for our intermediary partners to better service the ever-changing needs of landlord clients looking to diversify portfolios and maximise yields.”

CHL Mortgages adds Northern BDM

CHL Mortgages adds Northern BDM

 

In his role as BDM, he will uphold service standards and provide support to brokers. He will also engage with new and existing intermediary partners in the region to grow the lender’s profile.

Walker was most recently at Skipton Building Society for around 12 years, before that he worked at Amber Homeloans for over three years.

Prior to that, he was a mortgage underwriter for nearly four years and before that he was at Leeds Building Society, also as a mortgage underwriter.

Ross Turrell, commercial director at CHL Mortgages, said: “The role of the BDM has changed over the past two years. However, this evolution has really sharpened their skills, strengthened the relationships they have built with their brokers and increased the value, support and expertise they can offer in what continues to be a complex and, at times, uncertain lending environment.

“Aidan is a notable example of a BDM who has risen to the many challenges faced over the course of the pandemic and we are delighted to welcome him to the CHL team.”

The lender has been growing its team in recent months, appointing Stephen Wrigley as BDM for South West of England and Wales. It returned to lending in May last year.

Most portfolio landlords plan to remortgage or consolidate loans in the next year

Most portfolio landlords plan to remortgage or consolidate loans in the next year

 

According to a poll conducted by CHL Mortgages, 53 per cent of brokers had one to five portfolio landlord clients who were planning on remortgaging or consolidating loans this year.

The results also showed that 16 per cent of brokers surveyed had over 10 portfolio landlord clients who were likely to do so next year.

The survey also found that almost a third of respondents, 29 per cent, said more than 75 per cent of their portfolio landlord clients were considering opening a limited company to manage their properties.

Over half of brokers, 51 per cent, said clients had expressed an interest in setting up a trading company for their buy-to-let investments rather than a special purpose vehicle (SPV).

Ross Turrell (pictured), commercial director at CHL Mortgages, said the buy-to-let market had been strong from a purchase perspective in recent times and the lender expected “sustained levels of activity” from portfolio landlords making property purchases this year.

However, he said the survey results also showed the “vast remortgage potential currently on offer”.

Turrell added: “This potential will be driven by considerable numbers of five-year fixed rate deals maturing over the course of the year and the ball really is in the court of proactive advisers to make the most of these remortgage opportunities in what remains a highly competitive lending space and an uncertain interest rate environment.”

Buy-to-let sector is ‘changeable lending environment’ – Armstrong

Buy-to-let sector is ‘changeable lending environment’ – Armstrong

In such a changeable lending environment, it’s not easy to keep track but here is some of the most recent product-related news at the time of writing.

In terms of launches, CHL Mortgages released its first seven-year fixed rate mortgage. The lender has also increased its maximum loan to value (LTV) for individual and limited company borrowers to 80 per cent, up from 75 per cent.

Foundation Home Loans announced a new BTL product range exclusively for expat landlords.

Foundation’s expat proposition is available to non-SPV (special purpose vehicle) individual landlords who are UK nationals living as expats worldwide, as well as limited company borrowers.

Products will be available for standard BTL, short-term lets, houses in multiple occupation (HMO) and green options all available up to 75 per cent LTV for both purchases and remortgage with rates starting from 3.24 per cent.

Vida introduced a range of limited edition residential and BTL products. The limited edition BTL range includes five-year fixed rates for purchase and remortgage. A standard buy-to-let product at 75 per cent LTV is available at 3.04 per cent with a £1,495 fee and a fee-free equivalent starts at 3.19 per cent. For HMOs, a 75 per cent LTV product is available at 3.19 per cent with a £1,995 fee.

Hinckley and Rugby Building Society relaunched its BTL limited company lending proposition, boosting its current BTL offerings. This includes a five-year fixed rate at 2.95 per cent up to 70 per cent LTV with a £250 application fee and £999 completion fee.

Hanley Economic Building Society launched a five-year BTL fixed rate remortgage special. This is available from 3.03 per cent up to 80 per cent LTV with a £750 product fee and a valuation fee which is subject to property value.

 

Fleet Mortgages, Aldermore, TML and Paragon make rate changes

When it comes to rate changes, Fleet Mortgages cut rates by 20 basis points across all lifetime tracker products available in its three core ranges – standard, limited company and limited liability partnership and HMO/multi-unit freehold block (MUFB).

Aldermore Bank reduced product switch rates across its residential and BTL ranges for existing customers. BTL rates for individual landlords now start from 2.70 per cent, with reductions of up to 0.65 per cent, while limited company rates have been reduced by up to 60 basis points and are now available from 2.95 per cent.

The Mortgage Lender announced a series of rate cuts across its BTL product range. The lender has repriced its five-year fixed rate products at 75 per cent LTV, with rates now starting at 3.33 per cent for standard properties and 3.45 per cent for HMOs. Both come with a free valuation and either free legal services for purchases or £500 cashback for remortgages.

Rates have also been reduced at 80 per cent LTV, with rates now at 4.05 per cent. The product also comes with a free valuation and either free legal services or £500 cashback. In addition to the product repricing, TML has launched a new five-year mortgage at 3.20 per cent up to 70 per cent LTV with a completion fee of £2,495.

Finally, on the criteria front, Paragon Bank extended the window in which BTL borrowers can remortgage from three months to six months. Paragon will now offer borrowers the chance to remortgage up to six months ahead of their current buy-to-let product reaching maturity.

By the time you read this, additional product modifications are likely to have been made, such is the pace of change throughout the industry. And this only serves to highlight the continued value attached to the advice process and the support and expertise this can offer for a range of borrowers, not just landlords.