Posts with tag: buy to let mortgages

Buy-to-let mortgage products rise by 149% in 2 years

Published On: July 12, 2017 at 2:25 pm

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The number of buy-to-let mortgage products available in the UK market has risen by 149% over the past two years, according to the latest research from Mortgage Brain.

A further 2,634 deals for landlords have been produced for the market, from the 1,058 seen in June 2015.

Rises

In all, the number of mortgage products available to advisors has risen by 108% from June 2015 to June 2017. This is an extra 5,172 deals introduced.

There has also been a 48% rise in product numbers over the last year, taking the number of live mortgage products from mainstream lenders listed on Mortgage Brain’s systems.

Mark Lofthouse, Chief Executive of Mortgage Brain, noted: ‘The rapid increase in product availability over the past two of years is not only great news for mortgage advisers but a clear indication of the significant improvements the UK mortgage market has made in terms of product choice and availability.’[1]

Approved Mortgage loan application with rubber stamp

Buy-to-let mortgage products rise by 149% in 2 years

‘There are now over 5,000 more products available, and with strong rises being seen across all areas, advisers now have more opportunities to source and advise on a greater variety of products, and importantly, continue to meet the changing needs of their clients and their mortgage requirements,’ he added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/7/number-of-btl-mortgage-deals-up-149-in-two-years

 

Paragon Implements New Portfolio Landlord Underwriting Standards

Published On: July 12, 2017 at 9:46 am

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Paragon Mortgages will implement the Prudential Regulation Authority’s (PRA) Phase 2 changes, which require more thorough portfolio landlord underwriting standards – those with four or more mortgaged properties – for all new applications received from Monday 17th July.

Paragon Implements New Portfolio Landlord Underwriting Standards

Paragon Implements New Portfolio Landlord Underwriting Standards

All buy-to-let lenders must implement the new standards set out by the Bank of England’s PRA by 30th September 2017.

Paragon’s decision to implement changes ahead of the PRA deadline reflects the fact that the new standards require only minimal changes to its existing approach, as well as a desire to give intermediaries as much time as possible to make any necessary adjustments ahead of the mandatory deadline.

As from Monday, brokers should route all applications from portfolio landlords with four or more mortgaged properties exclusively through Paragon Mortgages. In addition, as is currently the case, any application from a limited company landlord or from a landlord seeking finance for a House in Multiple Occupation (HMO) or Multi-Unit Block (MUB) should also be submitted to Paragon Mortgages.

Mortgage Trust will focus on applications from individual landlords with three or fewer single, self-contained mortgaged properties.

Paragon will continue to request that all applications are accompanied by a comprehensive property schedule and seek additional documentation as required to fully understand each landlord’s business, including an asset and liability statement, cashflow details and a forward-looking business plan.

John Heron, the Managing Director of Paragon Mortgages, comments on the decision: “Currently, many lenders focus mainly on the rental income and value of the property they are lending against when underwriting buy-to-let property.

“At Paragon, we’ve always asked for information on all the properties a landlord holds and on the full range of their economic activity, so that we can assess their business in the round and consider the impact of the new lending on their performance.”

He adds: “Against this background, this implementation of the PRA Phase 2 changes should result in minimal change for intermediaries and their customers.”

Earlier this week, Aldermore released a new guide on its updated portfolio landlord underwriting standards.

Keystone Joins TMA’s Mortgage Club to Give Access to Buy-to-Let Mortgages

Published On: July 11, 2017 at 9:17 am

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Keystone Joins TMA's Mortgage Club to Give Access to Buy-to-Let Mortgages

Keystone Joins TMA’s Mortgage Club to Give Access to Buy-to-Let Mortgages

Specialist lending brand Keystone Property Finance has joined TMA’s Mortgage Club, which will give members direct access to Keystone’s Classic Range of buy-to-let mortgages.

Aimed at landlords with typically more complex borrowing requirements, Keystone accepts applications from individuals, SPV and trading limited companies.

The Classic Range offers a selection of fixed and tracker rates at up to 80% loan-to-value (LTV), including products designed especially for Houses in Multiple Occupation (HMOs), multi-lets and blocks of flats.

David Whittaker, the CEO of Keystone, comments on the partnership: “We are delighted to join the panel of TMA Mortgage Club. We know that the Classic Range will prove particularly popular with brokers looking to place deals for their portfolio landlord clients, who will have to adapt to a changed buy-to-let landscape from October.”

Bank Aldermore released a guide on its new portfolio landlord rule changes yesterday, ahead of industry-wide changes introduced by the Prudential Regulation Authority.

TMA Mortgage Club members will be able to submit and track cases online, generate AIPs and mortgage illustrations, and keep a tally of all procuration fees earned with Keystone – all of which will save brokers valuable time and is great for record keeping.

David Copland, the Director of Mortgage Services at LSL Group, adds: “We are pleased to welcome Keystone and are confident that their specialist range of buy-to-let mortgages, which include HMOs, multi-units and limited company products, will be popular with our members and their clients.”

TMA Mortgage Club members will need to register with Keystone before they can begin transacting the range with landlords.

Just last month, Keystone reduced all of its rates on its Classic Range for buy-to-let landlords. Pricing now starts at just 3.59% for a three-year fixed rate mortgage at 65% LTV. Further details of the lender’s latest offerings can be found here: /keystone-reduces-rates-classic-range/

Limited Companies Borrow more than Individual Landlords for First Time

Published On: July 4, 2017 at 9:12 am

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Limited companies are borrowing more than individual landlords for the first time, according to Mortgages for Business.

Limited Companies Borrow more than Individual Landlords for First Time

Limited Companies Borrow more than Individual Landlords for First Time

The firm’s latest Limited Company Buy-to-Let Index found that over half the value of buy-to-let lending in the second quarter (Q2) of the year was provided to limited companies.

Based on lending transactions brokered by Mortgages for Business, data from Q2 shows that limited companies borrowed more per quarter than individual landlords for the first time, including both purchase and remortgage transactions.

Limited company structures are particularly common when making new purchases, and Q2 proved no exception. Of buy-to-let purchase completions in Q2, 73% were performed by limited companies – up by more than 10% from 62% in Q1.

Similarly, limited companies accounted for 76% of buy-to-let lending by volume, up from 63% in Q1. This was caused by high volumes of purchase applications from limited companies, accounting for 77% of buy-to-let purchase applications in Q1 and 78% in Q2.

Steve Olejnik, the COO of Mortgages for Business, comments on the findings: “Landlords are increasingly looking to limited company structures because of the benefits they bring in the form of tax efficiencies and softer affordability testing. The structures are not without their hurdles, however, and we recommend all our clients take professional tax advice before deciding how to proceed.”

The index also shows pricing improvements, particularly three and five-year fixed rate deals, as buy-to-let lenders seek to compete in the ever-increasing limited company sector.

Among buy-to-let products available to limited companies, the average three and five-year fixed rates dropped by 0.4% each, to 3.7% and 4.0% respectively. This further narrows the gap with the wider market, with the average three-year fixed rate across all buy-to-let products just 0.2% lower, at 3.5%.

The appeal of limited company structures has become stronger following the Government’s reduction in mortgage interest tax relief for individual buy-to-let landlords.

The Mortgages for Business figures arrive as the Residential Landlords Association (RLA) calls on the Government to scrap its recent tax changes.

CML Revises its Buy-to-Let Forecast for 2017 and 2018

Published On: June 23, 2017 at 8:11 am

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The Council of Mortgage Lenders (CML) has revised its buy-to-let forecast for 2017 and 2018, which is down from previous expectations at the end of last year.

CML Revises its Buy-to-Let Forecast for 2017 and 2018

CML Revises its Buy-to-Let Forecast for 2017 and 2018

Its latest gross mortgage lending figures for May estimate that lending reached £20.1 billion. This is up by 12% on both April and May last year, in which £17.9 billion was advanced.

The CML’s buy-to-let forecast for 2017 and 2018 has been revised down from previous expectations at the end of last year, reflecting tax and prudential burdens in the housing and mortgage markets.

The organisation now expects buy-to-let lending of £35 billion in 2017 and £33 billion in 2018 – down from £37 billion in each year, which was forecast in December 2016.

The Director General of the CML, Paul Smee, comments on market conditions: “Remortgage activity and first time buyers continue to drive lending this year. Looking ahead, we expect to see this trend continue, but not as strongly, as the factors supporting lending are blunted by less favourable economic conditions.

“Buy-to-let had a weak start to 2017, and the sector’s contribution to overall net mortgage lending has fallen considerably over the last year.”

He continues: “While falling mortgage interest rates have helped support borrowing, tax and prudential measures are exerting pressure on the buy-to-let market. Following the distortion of the Stamp Duty change on second properties last year, we expected a slight recovery in lending levels. However, this has not materialised, and we therefore have lowered our forecast for buy-to-let lending this year and next.

“This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed.”

Shaun Church, the Director of mortgage broker Private Finance, also says: “While it is good to see mortgage lending increase, the market remains sluggish, with remortgaging driving a substantial amount of activity. The home mover market continues to be dampened by changes to Stamp Duty and a lack of new homes coming onto the market.

“The latest forecast on the prospects for buy-to-let mortgage lending clearly demonstrates the damage that has been inflicted on the market by the Stamp Duty surcharge and the phasing out of interest rate tax relief. A healthy housing market requires a range of tenure types to support both buyers and renters.”

Keystone Reduces Rates on Classic Range for Buy-to-Let Landlords

Published On: June 14, 2017 at 9:06 am

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Specialist lending brand Keystone Property Finance has reduced all of its rates in its Classic Range for buy-to-let landlords.

The rates have been cut by ten basis points. The lender’s LIBOR has also been reset downwards, at 0.29%.

Keystone Reduces Rates on Classic Range for Buy-to-Let Landlords

Keystone Reduces Rates on Classic Range for Buy-to-Let Landlords

Pricing in the Keystone Classic Range now starts at just 3.59% for a three-year fixed rate mortgage at 65% loan-to-value (LTV). This product is available on standard buy-to-let property.

The range also includes options at 75% and 80% LTV, as well as rates designed specifically for Houses in Multiple Occupation (HMOs) and multi-unit blocks.

Keystone’s Classic Range buy-to-let mortgages are available to both individual landlords and those operating through limited companies.

Unlike most other lenders, Keystone accepts trading limited companies, as well as SPVs, as standard.

The CEO of Keystone, David Whittaker, comments on the reductions: “We are delighted to be able to accommodate a price cut within the Classic Range. Landlords using trading limited companies as borrowing vehicles will be particularly pleased with the reduction, as we are currently the only buy-to-let lender not to require a fixed and floating charge or debenture.”

Keystone Property Finance is an intermediary-only lending brand, and brokers must be registered to gain access.

We remind all landlords looking to take out mortgages of the Government’s recent and ongoing reduction in tax relief on finance costs – including mortgage interest.

A detailed guide from the Government on how the restriction will affect you can be accessed here: /government-guide-tax-relief-changes-residential-landlords/

We also reported yesterday that Together has launched a new, specialist buy-to-let range created to support landlords that are looking to expand their portfolios.

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