Nationwide launches website targeted to educate and professionalise property investors
The Landlord Works is a free website targeted at property investors but can be harnessed by mortgage advisers to help clients manage a property portfolio, access a discounted self-assessment tool or educational guides alongside tools relating to managing time and income.
According to the English Private Landlords Survey, published in 2019, nearly two thirds of landlords believe the industry had changed for the worse, predominantly due to the increase in regulation, legislation and tax.
Paul Wooton, director of home propositions at Nationwide (pictured) said the project had been in development for two years and is recognition that UK landlords need support, in alignment with brokers.
“Advisers often say to us that they don’t know where to go when landlords are asking them about broader topics like legislation and regulation across the sector. We’ve also spoken to over 100 landlords trying to understand what a landlord wants and tested the site with them.”
With around 155 key pieces of buy-to-let legislation and Nationwide data suggesting 300 landlords a day search for support on tax, landlords have stressed that this information needs to come from a trusted source, said the mutual.
Wooton said: “This is what differentiates us from other providers. First and foremost this is about us and our belief that if you can provide the tools, guidance and support, that frees up the landlord to provide a decent home for their tenants.
“We have 16m members some of whom who are renting. They are seeking more support and we can offer that through first-time buyer mortgages and the industry work we carry out, but we also need to offer tools and guidance to landlords to provide better homes for tenants.”
The site does not offer a buy-to-let mortgage application submission tool for The Mortgage Works products yet.
The Landlord Works allows landlords to connect multiple bank accounts to their profile to allow them to manage their finances. It also includes an open banking-driven tool for property management.
Sara Bennison, Nationwide’s chief product and marketing officer, said: “The private rented sector is in dire need of reform, but to get there, landlords need to be given every ounce of support.”
“As a mutual we are committed to improving the housing system and the private rented sector is a major part of that, particularly today. It is why we are working with a range of other organisations on the Future of Home and how we can collectively address some of the issues and make a positive difference.”
Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said: “As one of the first major lenders to support limited company applications, The Mortgage Works has consistently been one of the most supportive lenders for the increased professionalisation of landlords.”
He added: “It is very positive to see Nationwide and The Mortgage Works strengthen their collaboration with intermediary partners even further with the launch of The Landlord Works, which we believe will be hugely beneficial to our clients.”
Landlords lack confidence in improving property EPC rating due to cost and awareness
According to research from The Mortgage Works (TMW), which polled around 750 landlords, respondents said this was due to a lack of capital and awareness about how to achieve it.
The UK government currently requires buy-to-let properties to have an EPC rating of E or above, but there are plans to raise it to C for new tenancies by 2025 and for all existing tenancies by 2028.
The biggest challenges for landlords to meet new sustainability requirements include property constraints, with 51 per cent citing it as a concern.
This was followed by access to property whilst tenants are renting and disruption whilst works are carried out, which both came to 44 per cent.
The report also noted that portfolio landlords were more likely to face challenges than individual landlords, with 66 per cent of those with 11 properties or more citing property constraints as a concern. This figure dropped to 49 per cent for those with one to 10 properties.
Half of portfolio landlords with 11 or more properties said gaining access to homes while tenanted and disruption caused by construction posed issues, while 43 per cent of landlords with one to 10 properties cited those reasons as barriers.
Affordability is also a problem, with more than a quarter of landlords saying a lack of funds was the biggest challenge for them.
Around six in 10 landlords said they would have to spend money to get properties up to standard and 14 per cent stated they would need to spend their annual rental income or more.
TMW’s head Daniel Clinton said it was not surprising that landlords were not confident in their ability to update their properties, and added the lender had brought out a Green Further Advance product earlier this year to support them in doing this.
The product has a rate of 1.49 per cent. It is available to existing customers and permits loans between £2,500 and £15,000 with a maximum loan to value of 75 per cent.
It is available on two-year and five year-fixed rate terms, and landlords who make green improvements can benefit from rates can be up to 0.50 per cent lower.
Clinton added: “It’s also great to hear that the government would like to introduce a new financial support package to help people improve the energy efficiency of their homes, however, we hope that any such scheme would also be open to helping landlords meet their requirements.”
TMW to launch 80 per cent deals for green homes
From tomorrow, TMW will offer a 2.49 per cent two-year fix and a five-year fixed rate priced at 2.99 per cent, with a two per cent fee. Both deals are for standard buy to lets and can be used for purchases and remortgages. Different fee combinations are available.
Limited company rates are priced at 2.79 per cent for a two-year fixed rate and 3.49 per cent for a five-year fix with a two per cent product fee.
TMW said it was balancing the need to offer mortgages to landlords with smaller deposits while supporting the private rented sector in its ambitions to become energy efficient.
Earlier this year, TMW launched its green further advance to help landlords fund improvements to their properties to help increase their energy efficiency.
Daniel Clinton, head of The Mortgage Works, said: “Buildings are the second largest source of emissions in the UK and we want to continue to do our bit to help tackle climate change. With impending regulation on the horizon affecting minimum EPC standards across the private rented sector, we are taking proactive measures through our lending proposition to support the transition.
“Providing buy-to-let mortgages on A to C rated properties at higher LTVs is a prudent step and follows on from the recent launch of our first ever green deal for existing customers seeking to make energy improvements.”
TMW is also re-introducing a range of buy-to-let mortgages with no product fees. The new remortgage rates start from 1.99 per cent at 65 per cent LTV with free valuations and standard legals.
TMW reduces limited company rates; Mansfield BS launches deal with reduced ICR
This will include the reduction of its two-year fixed product, up to 75 per cent loan to value (LTV), with a £1,995 fee, now priced at 2.94 per cent, down from 3.19 per cent.
The two-year fixed deal, up to 75 per cent LTV, with a £999 fee, has been cut by 0.35 per cent to 2.99 per cent.
The five-year fixed with a £1,995 fee up to 75 per cent LTV, has been cut by 30 basis points to 3.34 per cent. The £999 alternative has been reduced by 35 basis points to 3.39 per cent.
All the mortgages are available for purchase and remortgage and come with free valuation.
In addition, TMW will lower the rate on its two-year, fixed-rate buy to let remortgage product, up to 65 per cent LTV, by 0.20 per cent to 1.39 per cent with a £1,995 fee.
This product offers free valuation and free legals.
Daniel Clinton, head of The Mortgage Works, said: “The limited company part of the market continues to grow as more and more landlords choose to build their portfolios through limited companies.
“These latest changes will improve our competitive position and showcase our continued commitment and support to limited company landlords.”
Mansfield launches five-year fixed buy to let with reduced ICR
Mansfield Building Society has launched a five-year fixed rate standard buy–to–let mortgage with a reduced interest cover ratio (ICR).
Rental income must be at least 125 per cent of the monthly mortgage payment calculated at five per cent — lower than the lender’s typical ICR of 5.5 per cent.
For higher rate taxpayers purchasing a property, rental income must be at least 145 per cent of the monthly payments calculated at five per cent.
The product is priced at 2.74 per cent, has a £199 application fee and £1,300 completion fee. There is also a three per cent early repayment charge for the first three years.
Andy Alvarez, head of mortgage sales at Mansfield Building Society, said: “We think the new product will appeal because it comes with the certainty of fixed repayments over five years and the reduced ICR will enable landlords to perhaps borrow a little more than our rental income may ordinarily allow.
“This means that landlords may be able to consider new property opportunities or raise extra funds for light refurbishment work on an existing property.”
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.”