West One Loans cuts BTL lifetime tracker rates
Rates in its Lifetime Tracker Standard W1 range start from base rate plus 2.09 per cent, which is down from 2.24 per cent.
In its specialist lifetime tracker range it has also cut rates by up to 0.15 per cent, with rates beginning from base rate 2.34 per cent.
The specialist range is aimed at complex transactions, which includes houses, flats and maisonettes above or near commercial premises, houses in multiple occupation (HMO) and multi-unit freehold blocks (MUB).
The lifetime trackers come with early repayment charge (ERC) options, with a two-year term starting with a two per cent ERC in the first year and then falling to one per cent in year two.
Andrew Ferguson, managing director of West One’s BTL division, said that these were “uncertain times” for many borrowers and with more interest rate rises on the horizon “flexibility will be key”.
He added: “Many brokers will be approached by clients asking for help in reviewing the options available, especially those at the more complex end of the market.”
Ferguson continued that this was part of the reason it was cutting rates on its tracker range as it wanted to give brokers and clients “more ways to navigate their portfolios through this changing and challenging landscape”.
He noted that many investing in rental properties had been looking at specialist BTL products and due to its specialism in HMOs and MUBS it was well-placed to help new and experienced landlords.
Ferguson concludes: “Price will always be a factor when choosing a lender. However, our speed, flexibility and expertise are the reasons why brokers come to us time and time again. West One prefers a people first approach to underwriting, meaning we can say yes to more deals and are trusted by brokers to get deals done when it matters.”
Tough regulations to blame for drop in HMO numbers ‒ Octane Capital
Analysis of the government’s local housing statistics by Octane Capital found that on an annual basis the number of HMOs in England dropped three per cent year-on-year in 2020/21 to 497,884. The situation was more pronounced in the capital, where the number of HMOs declined by 13 per cent, the largest drop in any region.
The report noted that 11 boroughs in London had reported decreases, with the largest falls recorded in Ealing at 59 per cent and Lambeth with a 58 per cent decline.
Octane Capital suggested that this drop in HMOs across the county may be down to HMO rule changes from 2018 taking hold. This was when rules requiring a licence for all HMOs occupied by five or more people were introduced. Additionally, in order to obtain a licence, all rooms within the HMO would have to meet a minimum size criteria, with limits on how many people over the age of 10 who could live there.
Jonathan Samuels (pictured), chief executive of Octane Capital, said that the HMO licensing rules rightly looked to boost the standard of housing, but this had resulted in a decline in the number of operational HMOs across the market, particularly in London.
He continued: “We’ve continued to fund a high number of quality HMO deals throughout the pandemic and this sustained level of interest from professional investors is yet to show any signs of decline. This includes a large number of refurbishment transactions whereby investors are looking to drastically improve the quality of existing HMOs, so while volume has certainly fallen, we don’t believe this will be a long term trend and should benefit the nation’s tenants in the long run.”
Downing LLP provides wholesale financing to Greenfield Mortgages
The facility will be used to grow the business and expand its reach to new clients, according to Greenfield Mortgages chairman Steve Smith.
The Birmingham-based lender was founded in 2009 and offers regulated and unregulated bridging loans across England and Wales for residential property, commercial and semi-commercial properties, homes in multiple occupation (HMO) and homes needing refurbishment.
Loan terms can be up to 12 months and rates start from 0.49 per cent per month. The minimum loan size offered is £26,000 and the maximum is £5m.
According to its website, from enquiry to completion the team can “turn things around in seven days”. It can give rejections in a timely manner and explain the reasoning behind them.
Ian Allder, investment director at Downing, said: “We’re delighted to be working with Greenfield Mortgages. This new partnership underscores our continued commitment to the wholesale finance market and the property sector.”
David Grant, operations director and co-founder at Greenfield Mortgages, added: “It has been a great experience working with the team from Downing and we’re excited to be even better equipped now to embark on the next stage of our growth journey.”
West One Loans cuts rates on BTL lifetime tracker range
The largest reduction is in its Lifetime Tracker Stand W1 product range, which has been cut by 111 basis points to 2.99 per cent.
It can be used for houses, flats and new-build properties. It tracks the base rate and has a margins of 2.24 per cent.
Rates in its Lifetime Tracker Specialist W1 product range have fallen by 96 basis points, and rates start from 3.24 per cent.
The lender has also added an 80 per cent loan to value (LTV) product to this range
The specialist range caters to complex transactions, such as houses in multiple occupation (HMO) and multi-unit blocks (MUB).
Andrew Ferguson (pictured), managing director of West One Loan’s buy-to-let division, said that the new reduced rates along with its flexible underwriting and quick decision making would “provide a compelling proposition for brokers and their clients”.
He added: “While price is a factor, the depth of the West One proposition combined with speed, certainty and expertise is why brokers come to us. We underwrite manually so that we can say yes to more deals and we are trusted by intermediaries and property professionals to get the deal done.
“Those investing in rental properties have been increasingly looking for specialist buy-to-let products, and as we specialise in HMOs and MUBs we are well placed to offer finance to both new, and experienced landlords.”
Catalyst enters buy-to-let market
Its boost to let product rates start from 3.74 per cent and is available up to 75 per cent loan to value (LTV) including those with cash-out. It is also available up to 80 per cent loan to cost for purchases.
Those on the lender’s major distributor’s panel earn 1.5 per cent commission, brokers are eligible for one per cent commission. The arrangement fee is two per cent.
It has a 100 per cent interest cover ratio (ICR) and allows unlimited top slicing for high net worth borrowers.
It is eligible for complex property types, including high value single assets, holiday lets, student lets, low yield assets, ex-local authority, multi-unit freehold blocks with no exposure limits and houses in multiple occupation (HMO) that have unlimited bedrooms.
Mixed use property can also be used with the product up to 75 per cent LTV.
Chris Fairfax (pictured), chief executive at Catalyst, said it was excited to launch its first buy-to-let product and bring the company’s “can-do lending approach to the buy-to-let market”.
He said: “We have built a fantastic team of property finance experts who are ready to support our major distributors and brokers with a product that has extremely strong demand.
“Buy to let is a natural progression for Catalyst and sits well with our bridging, refurbishment, and development finance ranges. This is not mass market; it is solution driven focused lending that boosts both borrower eligibility and the brokers ability to help more clients.”
Molo Finance temporarily suspends buy-to-let products
According to its website, the reason for the withdrawal is due to changes in the capital markets, which the firm gets its funding from.
It explained that it had maxed out its current portion of funds allocated to buy-to-let and its new bucket was not ready to launch yet.
“We are anticipating this to be soon but currently cannot yet confirm a fixed date for this,” it said.
It said that there had been “unprecedented increases” in the cost of funding due to rising inflation along, with Bank of England base rate rises since the start of the year.
“Rather than stabilising, these rises have only worsened dramatically over the past few weeks,” it said.
The lender said that for those who have already paid a valuation it would refund the cost of this automatically over the next couple of days.
Current buy-to-let customers will not be affected by the change, and it has no impact on its residential products.
The lender offers mortgages for standard buy-to-let, limited companies, houses in multiple occupation and portfolio landlords.
A Molo Finance spokesperson said: “Molo has announced that it is temporarily closing its buy-to-let range to new applications. Molo receives its funding in set tranches and the current tranche has been filled.
“Molo’s new buy-to-let funding line is not quite ready to launch, which is why products have been withdrawn until further notice. Molo will relaunch as soon as the new buy-to-let funding line is ready and we’ll be proactively sharing this with the market.”
Quantum Mortgages appoints Impact Specialist Finance to packager panel
According to its website, it now has eight packagers on its panel: Active Investments, Brightstar, Brilliant Solutions, Complete FS, Connect for Intermediaries, Master Private Finance, Positive Lending, and Impact Specialist Finance.
Impact’s brokers will be able to access Quantum Mortgages buy-to-let products, which includes ranges for single unit, multi-units, specialist products, expat and foreign nationals, limited company specialist purpose vehicle, and green products.
Impact will also provide a referral service, so brokers can pass customers over to them for more complex cases where specific permissions are needed.
Referrals are accepted for regulated and non-regulated cases for bridging, specialist lending, buy to let and commercial.
Dale Jannels (pictured), managing director at Impact Specialist Finance, said that he had known Spencer Gale, sales and marketing director at Quantum Mortgages, and Jason Neale, managing director of the firm, for many years.
Consequently, when they set up Quantum “it was only natural that we would be one of the first to sign a packaging agreement with them following their launch.”
“With tenant demand high in many areas, we are seeing record levels of buy-to-let business and so a new lender offering us and our brokers more options is very welcome and we look forward to working with Spencer and the team,” he added.
Gale said: “The Quantum Mortgages team has a long-established relationship with Impact and have always found them to be one of the highest quality distributors. Being the experts they are, they totally get our new proposition and will no doubt maximise the common-sense criteria for the benefit of their intermediaries.
“As a new lender, our packaging partners will be limited to only the best quality, most knowledgeable and customer-focused firms, so Impact were of course one of the first companies we wanted to work with.”
Quantum Mortgages launched earlier this year and is headed up by Neale, who was previously head of buy-to-let lending at Axis Bank, with its primary focus on professional landlords.
The lender also launched a green ‘LTV boost’ mortgage earlier this year.
UTB adds Impact Specialist Finance to BTL packager panel
Impact’s brokers will be able to access UTB’s buy-to-let range, which has products for individual, limited company, portfolio landlords, houses in multiple occupation (HMO) and multi-unit freehold blocks (MUFB).
Brokers will be able to use Impact’s portal to place, source and track their cases and their customer relationship management system gives brokers control of their clients’ applications.
UTB announced in March that it would be launching a range of buy-to-let products this year and had appointed Barry Luhmann as its head of buy-to-let. It launched its packager panel at the same time.
Dale Jannels (pictured), managing director at Impact Specialist Finance, said: “Over the years we’ve worked with many new lenders when they first enter the market and although UTB aren’t a new lender, their launch into buy-to-let is a significant step in their growth plans.
“We are delighted to have been chosen as one of the first distributors and look forward to working with Mike and the team.”
Mike Walters, sales director of mortgages at UTB, added: “Since announcing our launch into buy-to-let in March, our team have been working hard to quickly bring the range to market and so this launch with impact, along with a small number of other specialist distributors, is a key milestone on our distribution plans.
“Dale and the team are renowned as experts in buy-to-let and so they were an automatic choice for us for this stage of our launch and we look forward to growing this part of our business in 2022.”
BTL2022: HMO licensing and planning disconnect can ‘cause a lot of stress’
Speaking at The Buy to Let Forum at the AJ Bell Stadium in Salford yesterday, Jason Wilde (pictured), national sales manager at Paragon, said customers wanting to convert to an HMO would need to talk to the licensing department to get planning permission, but this is rarely a simple process.
The type of planning permission needed would depend on the size of the HMO. Smaller HMOs are easier to secure planning permission for as they are covered under permitted development rights, whilst properties with seven bedrooms or more would need sui generis planning permission, which is a separate category of its own.
Wilde explained that HMO licensing is dealt with by the private housing department, whilst planning permission is dealt with by the planning department.
“You’d be forgiven for assuming that as most of them are in the same building that they talk to each other. They don’t,” he said.
Wilde said that as a lender, Paragon had seen multiple examples of properties that had the HMO licence in place but did not have the planning permission, and vice versa.
“Our understanding is that they are now starting to communicate [more] hopefully going forward, so you won’t get to get one without the other, but it is fairly common,” Wilde added.
“We and many other lenders have got to the completion stage and the borrower has said they have the HMO licence and they assume they have the planning permission but they don’t.”
Wilde added that licensing looked at room sizes, height of the roof, safety and condition of the property, whereas planning will look at parking, bike storage and bin storage.
He said it was very “simple” for this disconnect to cause issues at the completion stage, citing an example where a property was let out on a five tenant basis and was licensed as a small HMO.
The owners then decided to let it out as a single dwelling but didn’t realise that they had lost their HMO planning permission during that period of time.
He said that issues like this could crop up from solicitors three or four days before completion and can “cause a lot of stress”.
Article 4 presents challenge for landlords refinancing
Wilde said that landlords looking to refinance would also have to be aware of Article 4 of the General Permitted Development Order, which gives local authorities who use them the right to withdraw specified permitted development rights in certain areas. It was updated in 2011.
Under normal circumstances, a C3 residential property can be converted to a C4, or small HMO, within permitted development rights, so planning permission is not needed.
However, Article 4 changes mean that planning permission needs to be obtained for these conversions, and this is used by local authorities to curb the number of HMOs in a certain area.
Solicitors now will usually require a certificate of lawfulness of evidence of use prior to Article 4 being implemented to secure an HMO licence in certain areas, such as Manchester.
Wilde said there could be challenges around this as most people did not have records going back that far while GDPR changes means that landlords have not held on to assured shorthold tenancy (AST) agreement documents such as old council tax bills, which could evidence that a property is an HMO.
He said brokers should help landlords “futureproof” their HMOs, either by seeing if the local authority could provide evidence in the form of an AST agreement, and if that could not be done then proceed down certificate of lawfulness path.
“Once you’ve got that information it futureproofs that property from a HMO point of view.”
He continued: “What we are finding now with rates going up is that landlords, certainly ones who have been around for 20 years, haven’t necessarily been refinancing stuff because they’ve been on a nice low reversion rate, but now they are starting to remortgage.
“Some of these properties would have been let as HMOs before Article 4 would have come in, and they’ve got nothing in place to try and futureproof that.”
He added that there was not a centralised database detailing which local authorities used Article 4, but said the information could be found on each local authority website.
The Buy to Let Forum 2022 gallery
It has returned as an in-person event after nearly two years.
Speakers at the event included Phil Rickards, head of BM Solutions, Accord Mortgages’ managing director Jeremy Duncombe, Matt McCullough, national sales manager at Aldermore, Hampshire Trust Bank’s sales director Marcus Dussard, David Whittaker, chief executive at Keystone Property Finance, Paragon’s national sales manager Jason Wilde, Adrian Moloney, group intermediary director at OSB Group and Wesley Regis, key account manager at Fleet Mortgages.
The event is due to take place in Birmingham today, as well as Cardiff and Reading next week.
Here are the highlights of the Salford event.