Relaxing mortgage rules and falling interest rates are giving portfolio landlords a boost, as lenders battle for their custom.
As the number of smaller and accidental landlords declines due to the government’s withdrawal of tax breaks and the proposed withdrawal of no-fault evictions, lenders are increasingly focused on attracting portfolio landlords onto their books.
Landlords could borrow 50% more
BM Solutions, part of the Lloyds Banking Group and one the country’s two largest buy-to-let providers, has relaxed its lending rules to offer greater choice and flexibility for landlords. An increase of the maximum loan value from £2m to £3m means landlords could borrow up to 50% more, and although the portfolio limit remains unchanged at ten properties, landlords can now hold a maximum of five buy-to-let mortgages with the lender.
Phil Rickards, head of BM Solutions, said: “With improvements delivered to our portfolio underwriting proposition, now is the right time for us to take our next step to bolster the BTL market.”
Falling buy-to-let rates
According to the latest industry tracker report from Property Master, the majority of fixed-rate buy-to-let mortgage rates are continuing to fall, particularly for those with a lower loan to value (LTV). The report tracks the cost of mortgages from 18 of the largest buy-to-let lenders. It found that the monthly cost of a five-year fixed-rate mortgage with a 50% LTV fell by £13 and rates for a 65% LTV fell by £5. Two-year fixed rates fell by £2 per month on 65% LTV mortgages and £1 on 75% LTVs.
Angus Stewart, chief executive Property Master, said:
“There have been a slew of rate cuts amongst lenders along with new offers being launched that are looking very attractive to landlords wanting to expand their portfolios or needing to remortgage.”
He added: “Good news on rates may well entice some landlords back into the market by helping them offset the many recent regulatory and tax costs they have been struggling to absorb.”