Buy-to-let market update – December 2023

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 lending markets. The information within this article is correct as at 01/12/2023.

The Mortgage Works – has reduced rates by up to 0.30 per cent across its limited company and HMO range for new customers. The limited company rate reductions include a one-year fixed rate (purchase and remortgage) at 5.19 per cent with a 2 per cent fee, available up to 75 per cent loan to value (LTV). Two-year fixed rate (purchase and remortgage) at 5.19 per cent with a 3 per cent fee, available up to 75 per cent LTV. Five-year fixed rate (purchase and remortgage) at 4.89 per cent with a 5 per cent fee, available up to 70 per cent LTV. The lender has also updated their existing portfolio affordability assessment with the maximum LTV increased to 75 per cent from 65 per cent for portfolios with 11 or more properties. The stress rate has reduced to 5.00 per cent from 5.25 per cent and they have increased the aggregate portfolio LTV to 75 per cent where Nationwide BTL exposure is over £1m.

BM Solutions – has made improvements to the way they assess the affordability for their mortgage applications. The changes include a reduced minimum stress rate for all two-year fixed applications and a reduced pay rate plus margin for two-year fixed like for like applications. It has also aligned the minimum and pay rate plus margin for all five-year fixed applications. The lender has also reduced rates across their buy-to-let and let-to-buy range.

Virgin Money – has reduced buy-to-let rates by up to 0.28 per cent, with rates starting from 4.62 per cent.

Santander for intermediaries – selected buy-to-let fixed rates have reduced by between 0.05 per cent and 0.17 per cent.

Accord Mortgages – has reduced buy-to-let rates by up to 0.30 per cent for two-year fixed rates, 0.25 per cent for five-year fixed rates and three-year fixed rates by up to 0.15 per cent.

HSBC – has reduced buy-to-let rates by up to 0.20 per cent.

Paragon Bank – has reduced rates on 13 of its fixed-rate buy-to-let mortgages by up to 0.40 per cent. The lender has also reduced rates across eight of its two-year fixed-rate products as well as launching a new flat fee product.

Rates start from 4.19 per cent for landlords purchasing or remortgaging single self-contained (SSC) properties energy performance certificate (EPC) rated A-C. The rate, available at up to 70 per cent LTV, increases by 0.05 per cent when financing homes with EPC ratings of D or E. Interest coverage ratios (ICRs) are calculated at 6.19 per cent and 6.24 per cent respectively, and the product fee is set at 5.00 per cent.

Paragon has also reduced five of its five-year fixed-rate mortgages by up to 0.20 per cent. Rates start at 4.69 per cent for landlords financing SSC properties with an EPC rating of A-C, increasing to 4.74 per cent for homes rated EPC D or E and 4.94 per cent when borrowed on houses in multiple occupation (HMO) or multi-unit blocks (MUB). These limited-edition products are available at up to 70 per cent LTV subject to a 7 per cent product fee and ICRs are calculated at 5.50 per cent.

All products are available to landlords applying via limited company structures or in personal name in England, Scotland and Wales and come with a free valuation and £299 application fee. The lender has also launched a range of SAL member shared exclusive products available through selected brokers, including 3mc/SAL Mortgages. Along with additional product benefits, the products also come without a lender application fee, saving the member £299.

Precise Mortgages – has reduced rates on its mortgage buy-to-let products. The lender’s two-year fixed rates now start from 4.39 per cent. And its five-year fixed rates start from 4.80 per cent. The reductions come with options for personal ownership, limited company, HMO, and limited company HMO landlords.

Aldermore Bank – has launched a five-year fixed product to its buy-to-let range at 65 per cent LTV. This is a limited-edition deal with a seven-per cent fee and a rate of 4.69 per cent. The lender has also added the limited-edition five-year fix at 75 per cent LTV with a five-per cent fee to its core offering.

Additionally, its fee-free five-year fix has been relaunched with a rate of 6.29 per cent. These products are available to individual and limited company landlords with single properties.

Within the same offering, five-year fixed rates have been cut by 0.20 per cent and two-year fixes have been reduced by 0.35 per cent. For individual and limited company landlords with multiple properties, the limited-edition five-year fix at 65 per cent LTV with a seven-per cent fee has a rate of 4.59 per cent. Aldermore has also relaunched the fee-free five-year fix in this range, which is priced at 6.19 per cent.

For further information on buy-to-let 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.