The Mortgage Works launches green further advance range
Loans of £2,500 to £15,000 at up to 75 per cent loan to value are available with a rate of 1.49 per cent, which the lender said was “significantly lower” than its standard range.
The range comprises two and five-year fixed products with no fees which are available to landlords who will use the whole loan for sustainable improvements.
The list of potential renovations includes adding solar panels, window upgrades or replacements, boiler upgrades, and installation of air source heat pumps and new electric car charging points.
Buy-to-let (BTL) properties in England and Wales are required to earn an Energy Performance Certificate (EPC) rating of E by law.
However, the Department of Business, Energy and Industrial Strategy is currently consulting on improving energy efficiency in privately rented homes.
This includes a proposal to raise the minimum property EPC rating to C for all new tenancies by 2025, and for all existing tenancies by 2028.
“As one of the UK”s largest buy-to-let providers, it’s important that we support our landlords in making their properties more sustainable and energy efficient,” said Daniel Clinton, head of The Mortgage Works.
“Buildings are the second largest source of carbon emissions in the UK and small changes, such as adding insulation to pipes, can make a big difference. Landlords are required to ensure their properties have at least an EPC E rating, but in future this could be increased to C.
“By launching Green Further advance, with rates significantly lower than our standard range, we hope this will give landlords the push they need to start making those changes,” Clinton said.
Barclays trims rates by up to 26bps, Nationwide launches broker forum – round-up
The lender is making price reductions on some 75, 80 and 85 per cent LTV purchase and remortgage products that will come into effect on 31 March.
Of those listed, the largest rate cut comes to its two-year fix at 85 per cent LTV that comes with a £999 fee, which is being cut from 2.75 per cent to 2.49 per cent.
The same product at 80 per cent LTV is being cut to 1.97 per cent from 2.04 per cent, while the 75 per cent LTV version is dropping to 1.38 per cent, from 1.5 per cent.
On the latter two deals, Barclays is also cutting rates for existing customers so that they match the rates given on new business.
Meanwhile, Nationwide Building Society and The Mortgage Works (TMW) are launching a broker engagement panel to take feedback and suggestions from advisers.
The initiative is being launched on a three-month pilot with invitation emails being sent out this week to brokers who are registered with Nationwide and TMW.
There is no limit on the number of brokers that can join and the mutual is encouraging as many brokers as possible to sign up through its website.
It said the new platform was likely to become a permanent feature depending on the level of broker engagement during the trial period.
Ian Andrew, director of intermediary relationships at Nationwide, said: “Although we always strive to provide the best possible service, there is always room to improve.
“That is why we are launching our broker connect panel because, by hearing the views and experiences of a wide range of brokers, we can continue to put them at the heart of what we do.
“However, it’s important we hear as many voices as possible from across the industry, which is why we encourage as many brokers as possible to sign up.”
Platform cuts rates up to 90 per cent LTV and TMW releases five-year fixed BTL remo
Rates on the returning mortgages vary from 2.15 per cent for the 80 per cent LTV product with a £1,499 fee to 3.4 per cent at 90 per cent LTV with a £999 fee.
All fee-free products between 80 and 90 per cent LTV now have £1,000 cashback.
The lender has also adjusted rates with two and five-year mortgages at 90 per cent being cut by up to 0.32 per cent and equivalent products at 60 per cent LTV seeing reductions of up to 0.16 per cent.
Meanwhile, the rates on two and five-year fixed mortgages at 70 and 75 per cent LTV have risen by up to 0.26 per cent.
Two and five-year fixes with a £1,999 fee have been brought back for buy-to-let borrowers while rates on fee-free alternatives have been cut by as much as 0.42 per cent.
For switching residential borrowers, two and five-year fixes at 80 and 90 per cent LTV have seen rate cuts of up to 0.25 per cent.
Rates now range from 1.81 per cent for a £1,499 fee-paying two-year fixed product at 80 per cent LTV to 3.72 per cent for a five-year fixed at 90 per cent LTV with no fee.
Products for switching buy-to-let borrowers have seen rate cuts of 0.03 per cent on two-year fixes with a £1,499 fee while equivalent five-year fixes at 60-75 per cent LTV have been reduced by up to 0.04 per cent.
TMW relaunches five-year fixed BTL remortgage
The Mortgage Works (TMW), the specialist buy to let arm of Nationwide Building Society, has relaunched a five-year fixed purchase and remortgage product 50 per cent LTV.
For borrowers seeking a free valuation and either cashback or free legals, the rate is 1.74 per cent.
The incentive-free option has a rate of 1.69 per cent. Both mortgages have a fee of £1,995.
Daniel Clinton, head of The Mortgage Works, said: “As a leading buy-to-let mortgage provider, we look to offer a broad range of mortgages to support landlords.
“By re–introducing our 50 per cent LTV mortgage, we are able to offer our most competitive rates to those landlords, with larger deposits, looking for longer term rate security.”
TMW launches limited company BTL fee-assist remortgages
Four deals are included in the remortgage range. A two-year fix at 3.34 per cent with a £1,995 fee and a £995 fee option with a rate of 3.49 per cent.
For borrowers who want a longer term, a five-year fixed rate at 3.69 per cent is available with a fee of £1,995. The £995 option comes with a 3.84 per cent rate.
Daniel Clinton, head of TMW, said: “Over the last few years, we have seen more and more landlords build their portfolios through limited companies following changes to the tax regime.
“As a leading buy-to-let mortgage provider, we always look to offer a range of competitive mortgages to suit whatever the landlord’s circumstances. These latest products reinforce our support for the limited company market, helping reduce upfront costs for landlords.”
Saffron Building Society returned to limited company buy-to-let lending this week at 75 per cent LTV for purchases and remortgages.
TMW and Accord increase buy-to-let mortgage rates
TMW, the buy-to-let arm of Nationwide Building Society, is increasing rates on 14 new business deals by up to 35 basis points.
The changes primarily affect its 75 per cent loan to value (LTV) products and include deals across its purchase and remortgage and remortgage only ranges.
Examples include the five-year fix for purchase and remortgage at 75 per cent LTV with £1,995 fee – which has been increased 20 basis points from 1.94 per cent to 2.14 per cent.
The two-year fix for remortgage only with free legals at 75 per cent LTV with £995 fee has also risen by 20 basis points from 1.99 per cent to 2.19 per cent.
The largest rise is the two-year fix also for remortgaging only with £250 cashback at 75 per cent LTV with £995 fee which has increased 35 basis points from 2.04 per cent to 2.39 per cent.
Meanwhile Accord has updated rates on several of its BTL product transfer deals making increases on eight and trimming them on two others.
The increases take place on the 60 per cent and 65 per cent LTV ranges by up to 10 basis points.
For example, in the 60 per cent LTV range the two-year fix with £0 fee has been increased by 10 basis points to 2.10 per cent.
And at 65 per cent LTV the two-year fix with £1,495 fee product has also increased by 10 basis points to 1.77 per cent.
Meanwhile, at 75 per cent LTV a pair of five-year fixes with zero fee and £950 fee have been cut by two and three basis points respectively to 2.37 per cent and 2.17 per cent.
Nationwide’s mortgage lending supported by strong BTL activity
However, the building society said its lending activity was upheld by strong business through its buy-to-let arm, The Mortgage Works which remained open throughout the year.
Its specialist gross mortgage lending, predominantly made up of buy-to-let business, increased by £1.6bn to £39.3bn compared to the previous six months.
The balances of its prime mortgages rose to £151.4bn from £151.1bn.
Nationwide said its overall lending recovered once the property market reopened and changes to stamp duty.
The majority of the mortgages on its books were also low risk, with 94 per cent of its loans having an average loan to value (LTV) of 56 per cent.
The mutual’s market share remained flat at 12 per cent, a negligible drop from 12.3 per cent last year.
Stable net interest
Nationwide’s net income margin increased to 1.15 per cent from 1.12 per cent last year.
Due to an improvement in mortgage margins which the mutual said had been declining for four years, Nationwide managed to increase its net interest income by £63m to £1.45bn.
Overall, its underlying profit before tax took a slight hit, falling to £305m from £307m.
Its total impairment charge for the period rose to £139m, up from £57m last year, which Nationwide said was due to the “deterioration in economic outlook” and expected credit losses.
The mutual described four possible scenarios dependent on the outcome of the Covid-19 pandemic and Brexit and these were adjusted to reflect the severe falls in GDP seen in the first half of the year.
Its neutral scenario predicted a slight recovery in GDP amidst an unemployment rate of 8.9 per cent and a 10 per cent drop in house prices. The upside outcome forecast a five year per increase in house prices, while the severe scenario predicted an 11 per cent decline in prices.
Chris Rhodes, chief financial officer of Nationwide Building Society, said: “We always take a conservative approach to managing our business and you can see this clearly in today’s results.
“Whilst the society’s performance has clearly been impacted by the pandemic, it is pleasing to see the benefits of our conservative approach feed through into the results for the half year.”
He added: “Our margin has stabilised, costs have reduced and profit is stable compared to the same period last year, despite a rise in impairment charges associated with the pandemic and the current uncertain economic outlook.”
TMW cuts limited company BTL rates
The cuts will be made on the 75 per cent loan to value (LTV) range and will be effective from 12 November.
The two-year fixed has been reduced from 3.39 per cent to 3.19 per cent with a £1,995 fee, while the £995 fee alternative has seen a reduction of 25 basis points to 3.34 per cent.
Across its five-year fixes, the product with a £1,995 fee is now 3.64 per cent, down by 0.25 per cent while the deal with a £995 fee has been reduced by the same amount to 3.74 per cent.
All the products also have free valuations.
Nationwide director of mortgages Henry Jordan said: “TMW offers landlords a broad range of options to meet their varying needs. We are making reductions to our two and five-year limited company products to improve the competitiveness of the range.
“These reductions show our continuing support for landlords looking to manage their finances through fixed rates.”
Tenant demand hits all-time low as gross rental income falls – TMW
The Gross Rental Income analysis based on a survey by BVA BDRC showed that the average income landlords earn per year dropped by £1,000 to £60,000 coinciding with the decline in demand.
However, although tenant demand and overall gross income dropped, the average income per property rose from £7,992 in Q1 to £8,571 during the period, as landlords reduced their portfolio sizes.
This was also despite fewer landlords reporting they had increased rents over the last year; 21 per cent said this was the case compared to 27 per cent in the first quarter.
The accompanying Tenant Demand Report for Q2, recorded a net score of –11 as the number of landlords citing a slight or significant decline in interest from tenants outstripped those reporting a slight or significant increase.
This is the lowest index score for tenant demand since 2012 and a further drop from the score of –8 reported in Q1.
The proportion of landlords intending to raise their rents over the next six months also dropped as this stood at 13 per cent, down from 15 per cent six months ago.
However, the majority of landlords said they would not make any changes to this as 61 per cent said the rent they charge would remain the same for the next six months.
Increases in rent overall appear to have fallen as only eight per cent of landlords said rent had gone up in the areas they owned properties in. This was compared to the 20 per cent who said the same in Q1.
Landlord and property characteristics
Homes in multiple occupancy (HMOs) provided landlords with the highest yields at 6.9 per cent during the second quarter.
This was followed by bungalows at six per cent then semi-detached houses at 5.9 per cent. Multi-unit blocks (MUBs) provided rental yields of 5.8 per cent while individual flats provided 5.7 per cent.
When it came to employment status, self-employed landlords generated the highest gross rental income at an average of £105,000 a year.
Landlords who were self-employed in other professions saw an average income of £54,000 and the full-time employed received an average rental income of £48,000.
Those who work part-time received the lowest average rental incomes at £37,000 a year.
Borrowing landlords also continued to generate the most profit, the report showed.
Landlords with buy-to-let mortgages earned more than those who owned their portfolio outright, bringing in £75,000 compared to £40,000.
TMW overtakes BM Solutions as largest BTL lender
Overall, buy-to-let (BTL) gross lending totalled £42.2bn in 2019, up 4.2 per cent on 2018.
Unlike the residential mortgage market, buy to let is far less concentrated in a handful of lenders, however despite this, the same big six banks still saw their BTL market share increase by 4.7 per cent and accounted for £20.63bn of new lending – almost half the market.
TMW grew its new BTL lending by £2.1bn to complete £6.6bn, taking a 15.6 per cent share of the market and leapfrogging BM Solutions for top spot. (See table below)
As the buy-to-let market has become more complex following tax and regulation changes TMW began rolling out a limited company proposition in 2018 to support landlords who are increasingly choosing this method of ownership.
In contrast, BM Solutions saw its new lending fall by around £500m as it completed just over £5bn in BTL business, with 12 per cent of the market.
The lender, which is part of Lloyds Banking Group, has chosen to focus on traditional mainstream landlords and has yet to introduce a limited company product, but has expanded its offer to include larger portfolios.
Coventry Building Society, with its Godiva brand, Virgin Money and Metro Bank were among the big name lenders to see their market share fall.
Coventry BS remained the fifth largest buy-to-let lender, completing £2.8bn worth of loans, but this total was down £1bn on 2018.
Virgin Money completed 1.88bn of lending, down £400m from the previous year, while Metro Bank was hit with capital and regulation issues which saw it cut lending by more than half to around £330m.
Meanwhile NatWest grew its BTL business by £700m to complete £2.08bn of lending, becoming the seventh largest lender in the market – leapfrogging Virgin Money and Paragon.
And the completed One Savings Bank merger, which includes Precise Mortgages, Kent Reliance and Interbay Commercial, saw it combine to become the fourth largest lender with £3.89bn of completions.
TMW, Kensington and Teachers BS update BTL products – round-up
The Mortgage Works (TMW) has withdrawn four of its new business deals and increased the rate on another.
The lender, which is part of Nationwide Building Society, has increased the rate on its two-year fixed limited company product up to 75 per cent loan to value (LTV) with a £995 fee to 3.39 per cent from 3.19 per cent.
Two of those deals withdrawn are also from its limited company range, both with no fee, while the others are five-year fixes from its mainstream range up to 50 per cent LTV with £1,995 fee.
Kensington cuts rates
Kensington Mortgages has cut rates on its buy-to-let deals by up to 0.5 per cent.
The lender has four fixed rate products available at up to 75 per cent LTV open to individuals or limited companies.
The two-year fixes are now available at 4.14 per cent with a £1,999 fee, or 4.49 per cent with no fee – assessment rates are at 6.15 per cent and 6.49 per cent respectively.
A pair of five-year fixes are live at 4.24 per cent with a £1,999 fee and 4.59 per cent fee free – assessment rates for these are unchanged.
Teachers BS extends holiday let deals
Teachers Building Society has added two fixed rate products to its existing variable rate holiday let deal.
The mutual said these were aimed at supporting increased demand from new and existing property investors looking to capitalise on growth in the UK holiday-let market.
“As more consumers plan to take a break on home soil as a result of the ongoing pandemic, the need for self-catering holiday accommodation in popular destinations is growing,” it said.
The products, which are available from today are available up to 75 per cent LTV, with the three-year fix at 3.49 per cent and the five-year loan at 3.74 per cent.
Both products have a £99 application fee and a £899 arrangement fee.
Teachers for Intermediaries business development manager Ralph Punter said: “As our own research has shown, consumer demand for UK based holidays has increased as a direct result of the pandemic, a trend we expect to continue into next year too.
“Combined with the recently announced stamp duty holiday, we expect to see increased interest in the holiday let market from investors.
“Our new mortgage products will support those looking to purchase holiday-let homes for short term rental purposes.”