Buy-to-let market update – April 2024

By Doug Hall, director, 3mc

Welcome to ‘Buy-to-let market’, a column aimed at providing you with recent criteria and product updates within the buy-to-let (BTL) lending markets. The information within this article is correct as at 27/03/2024.

BTL market update: –

The Mortgage Works – has reduced rates on selected BTL and limited company products by up to 0.4 per cent. New product highlights include a five-year fixed rate (purchase and remortgage) at 3.99 per cent with a 3 per cent lender fee, available up to 55 per cent loan to value (LTV). Five-year fixed rate (purchase and remortgage) at 4.04 per cent with a 3 per cent lender fee, available up to 65 per cent LTV. Five-year fixed rate (purchase and remortgage) at 4.59 per cent with no lender fee, available up to 65 per cent LTV.

The new limited company rates include a two-year fixed rate (purchase and remortgage) at 4.99 per cent with a 3 per cent lender fee, available up to 75 per cent LTV. The lender has also reduced its interest coverage ratio (ICR) calculations to improve affordability for borrowers. For higher-rate taxpayers, the ICR has been reduced from 165 per cent to 160 per cent. For limited company borrowers and lower-rate taxpayers it has been reduced from 130 per cent to 125 per cent. The lender has also lowered their existing portfolio rental calculation stress rate from 5 per cent to 4.5 per cent.

Virgin Money – has launched a range of five-year fixed rates with early repayment charges in the first two years. The new rates start from 4.89 per cent.

Coventry for intermediaries – has lowered its BTL stress rates. The new stress rates are as follows: 4.75 per cent (previously 5.5 per cent.) for five-year fixed rates, for purchase and remortgage applications – or product pay rate (whichever is higher). 5 per cent (previously 5.5 per cent) for two-year fixed rates, for remortgages with no additional borrowing – or product pay rate (whichever is higher). 6.5 per cent (previously 7 per cent) for two-year fixed rates, for purchases and remortgages with additional borrowing – or product pay rate plus 2 per cent (whichever is higher).

The lender has also reduced selected BTL products by up to 0.26 per cent.

Skipton for intermediaries – has lowered its BTL stress rates. For products with a fixed term of less than 5 years, the BTL stress rate has reduced to 7.05%. For products with a fixed term of 5 years or more, the BTL stress rate has reduced to 5.99%.

Santander for intermediaries – has reduced their BTL fixed rates by up to 0.12 per cent.

Paragon Bank – has launched a new range of five-year fixed rate products for portfolio BTL clients. Available up to 75 per cent LTV, these new five-year fixed rates start from 5.35 per cent, with both 2.5 per cent and fixed product fee options available. These products are available for purchase and remortgages, and all come with a free mortgage valuation.

Precise – has reduced rates on its Tier 1, 80 per cent LTV, BTL products by 0.50% and reintroduced products. The lender has reintroduced its Tier 2 and Tier 3 landlord products, starting from 5.19 per cent, designed for BTL borrowers who have previously experienced “challenges” with credit.

Aldermore Bank – has launched several limited edition BTL deals and lowered select BTL rates. The products include two BTL products for landlords. This includes a five-year fixed rate up to 65 per cent loan LTV with a 1.5 per cent lender fee at 5.59 per cent, and its fee-free version is 5.89 per cent.

The lender has also cut rates for its existing five-year fixed rates at 65 per cent LTV with a 5 per cent lender fee by up to 0.10 per cent. This includes its individual and company landlord with single residential investment property deal, which is priced at 4.8 per cent, and its multi-property for individual and company landlords with residential investment properties is priced at 4.79 per cent.

Leeds Building Society – has stopped issuing new holiday let loans in North Norfolk District and North Yorkshire councils for a 12-month trial period starting from the end of March. The lender has also reduced their stress rates. Five-year product BTL stress rate has reduced to product rate +0.5 per cent (minimum 5.5 per cent). The five-year product limited company stress rate has reduced to product rate + 0.5 per cent.

Clydesdale Bank – has reduced select BTL mortgage rates. Its two and five-year fixed BTL rates have reduced by 0.3 per cent.

For further information on BTL mortgages both for individuals and limited companies please contact SAL Mortgages on 0131 450 7169 or visit the SAL website www.scottishlandlords.com

Please note lenders have different minimum criteria requirements and not all landlords and property types will qualify for a specific product. The product rates are correct at the time of writing the article and are subject to change.

This is an advertisement only and in no way should be viewed as a personal recommendation or advice. Before a recommendation of the suitability of the product can be given, we will direct you to 3mc (UK) Limited who can provide independent mortgage advice. As part of this they will ask questions so that they can fully understand your circumstances before giving advice.

SAL Mortgages is operated exclusively for the Scottish Association of Landlords (SAL) by 3mc (UK) Limited who is Authorised and Regulated by the Financial Conduct Authority and is entered on the FS Register under reference 302992.

Please note: 3mc can advise/arrange Business Buy to Let (BBTL) and Consumer Buy to Lets (CBTL). Of the two, only Consumer Buy to Lets are regulated by the FCA.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

ANY PROPERTY USED AS SECURITY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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