Buy-to-let market update – December 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 29/11/2024.

Buy-to-let market update: –

BM Solutions – has increased their maximum loan to value (LTV) to 80 per cent for specific applications, including fees, for purchases, remortgages, and further advances. The maximum loan is £350,000, the minimum EPC rating has to be A-C, the loan cannot exceed 80 per cent LTV, including any fees being added to the loan. The change also applies to further advances and product transfers. The lender has also increased the number and total portfolio value of BTL or let-to-buy (LTB) mortgages landlords can have with Lloyds Banking Group. This consists of Bank of Scotland, Birmingham Midshires, TMB, Halifax, Intelligent Finance, Lloyds Bank, C&G and Scottish Widows. The maximum number of BTL / LTB mortgaged properties with Lloyds Banking Group allowed has increased from 5 to 10. The lender has also increased selected BTL products by up to 0.23 per cent.

The Mortgage Works – has made changes to selected rates across its new business product range. There are a combination of rate increases and rate cuts. These include the BTL two-year fixed 65 per cent LTV with no application fee which has increased to 4.79 per cent. The lender’s limited company two-year fixed BTL at 75 per cent LTV with a £1,495 lender fee has increased to 5.99 per cent. However, its HMO two-year fixed 75 per cent LTV with a £1,495 lender fee has decreased to 5.84 per cent and its limited company two-year fixed with a 3 per cent lender fee has also been reduced to 4.74 per cent. The lender will also now accept intercompany loans as a deposit option for BTL mortgage applications from limited company landlords.

Santander for intermediaries – has increased selected BTL fixed rates by up to 0.13 per cent. The lender has also made changes to its BTL affordability rates. Rates have been lowered on the lender’s standard affordability rate from 7.31 per cent to 7.15 per cent. Meanwhile, both the five-year fixed and pound-for-pound remortgage affordability rates have been reduced from 5.31 per cent to 5.15 per cent.

NatWest for Intermediaries – has increased rates, the two-year fixed purchase option at 60 per cent LTV with a £995 lender fee has gone up from 4.59 per cent to 4.69 per cent, while the fee-free option has increased by 0.05 per cent to 5.15 per cent.  The equivalent five-year fixed rates have increased from 4.47 per cent to 4.59 per cent and from 4.48 per cent to 4.65 per cent respectively.

Paragon Bank – has launched a new limited-edition five-year fixed product range available up to 65 per cent LTV. Rates start from 4.74 per cent and all products come with a free valuation.

Coventry for Intermediaries – has reduced its BTL stress rates. New stress rates include a five-year fix for purchase or remortgage applications at 4.5 per cent, which was previously 4.75 per cent. The stress rate for two- and three-year fixes for remortgages with no additional borrowing is now 4.5 per cent, down from 5 per cent, while two- and three-year fixed and variable rate deals for purchase and remortgage with additional borrowing now come with a stress rate of 5.5 per cent, down from 6.5 per cent.

The Mortgage Lender (TML) – has launched a number of limited-edition BTL products, as well as a semi-exclusive product for a number of specialist distributors / key accounts, including SAL Mortgages/3mc.

The limited-edition products start from 3.94 per cent with various lender fee options and the semi-exclusive product is a five-year fixed multi-loan product, fixed at 4.93 per cent with a 5 per cent lender fee. With the multi loan, a landlord only pays for 1 booking fee and 1 valuation fee.

Aldermore Bank – has launched new BTL limited-edition two-year products. The limited-edition two-year fixed rates are available from 4.94 per cent up to 75 per cent LTV with a 3 per cent lender fee for individual and company landlords with single residential investment properties. Two-year fixed rate multi-property products start from 4.89 per cent at 75 per cent LTV with a 3 per cent lender fee or 6.19 per cent with a £1,999 lender fee. The lender has also improved their BTL remortgage criteria for recently purchased properties. The change allows landlords to apply for a BTL remortgage from the first day post-purchase of the property. The change means the lender now allows the maximum loan to reflect the current market value of the property, up to the standard maximum 75 per cent LTV, for remortgages between day one and six months.

Accord Mortgages – has reduced its interest coverage ratio rates (ICRR), the stress rates it applies to BTL affordability calculations.  The changes mean that where landlords are remortgaging on a like-for-like basis, the ICRR has reduced to 5.5 per cent (previously 6.0 per cent), or product rate plus 1 per cent (whichever is higher) for products with an initial term of less than five years. For products with a term of five years or more, the ICRR is 4.75 per cent, down from 5.5 per cent, or product rate plus 1 per cent. Where a landlord is purchasing a property or remortgaging with capital-raising, the ICRR is 5.5 per cent (was 6.5 per cent) or product rate plus 2 per cent (whichever is higher) for mortgages with a term of less than five years. For product terms of five years or more, the ICRR has reduced to 4.75 per cent (was 5.5 per cent) or product rate plus 1 per cent. The lender’s interest coverage ratio (ICR) remains at 125 per cent for all basic rate taxpayers and 145 per cent for all higher rate taxpayers.  

Vida Homeloans – has improved their BTL criteria, with the maximum loan size for BTL applications increased to £2m for loans up to 75 per cent LTV, across all credit tiers. The new limit applies to all personal BTLs, Special Purpose Vehicles (SPVs), Multi-unit Blocks (MUBs) and Houses in Multiple Occupation (HMOs). In addition, Vida has reintroduced their BTL limited-edition, five-year products, up to 80 per cent LTV, with options at both 4 per cent and 6 per cent lender fees for individual units or HMOs/MUBs.

Foundation Homeloans – has launched a new F2 limited-edition holiday let five-year fixed-rate product, which is for landlords financing a more specialist property type. The new product is available up to 75 per cent LTV, has a rate of 6.24 per cent and comes with a 2.25 per cent lender fee. The lender has also launched a semi-exclusive five-year fixed rate product with only a three-year early repayment penalty period. The semi-exclusive product is available through limited distribution including SAL Mortgages/3mc.

Furness Building Society – has launched new BTL and holiday let products. The new products cater to BTL, and holiday let customers across England, Scotland, and Wales. The new two-year products offer rates starting at 4.84 per cent for cases up to 65 per cent LTV and 5.04 per cent up to 75 per cent LTV, with a £995 lender fee. Holiday let landlords can also benefit from a two-year fixed rate at 5.28 per cent up to 65 per cent LTV and a five-year fix at 5.18 per cent up to 75 per cent LTV, both with a £995 lender fee.

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 specialist 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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