private rented sector housing

Buy-to-let mortgages are changing as market opens up for landlords

Mortgage lenders are beginning to fire on all cylinders again as product numbers rise and rates fall. Landlords seeking buy-to-let mortgages now have even more choice.

Physical mortgage valuations are now once again possible after the government began to lift some lockdown restrictions. In the meantime, many lenders had been conducting desktop valuations as a way of keeping the market moving. However, this meant many products were taken off the shelves, as lenders favoured lower risk, more straightforward mortgage options.

With the Bank of England base rate still sitting at its lowest ever point of 0.1%, many mortgage rates are also incredibly low. The flip side of this, of course, is that it’s not a great time for savers. But those wanting to invest their liquid assets in property instead can now maximise their borrowing power.

Buy-to-let bounceback

In recent days, a number of banks and building societies have revealed new products and rates. In the residential mortgage market as a whole, there is now a huge choice of options. Further to this, landlords seeking new mortgages or remortgages will find a wider spectrum of offers available to them, too.

Here are some of the lenders that have refreshed their product ranges recently:

Barclays: The bank resumed physical valuations earlier this week, and has renewed its available products as a result. It has reduced its buy-to-let ranges by as much as 0.10%. It offers a loan to value of up to 75% on certain remortgage products, including a 2.19% five-year fixed rate and a 2.55% two-year fixed rate. For those looking at 60% LTV on a new mortgage, there’s a two-year fixed-rate product available at just 1.35%. If you’re looking for a longer commitment, there’s a five-year fixed rate of 1.8%.

Lendinvest: The property investment specialist has not only repriced its rates, but also changed its definition of a house in multiple occupation (HMO). It now classes an HMO with up to six bedrooms as a small HMO for valuation purposes. For standard buy-to-let, two-year fixed rates start at 2.99% up to 65% LTV, which is a drop from 3.35%. It also offers incentives, such as £500 cashback for its 75% LTV five-year fixed rate product.

Virgin Money/Clydesdale Bank: Part of the same group, the lenders are now lending up to 90% LTV, with 80% LTV for buy-to-let mortgages. They have also lifted limits on loan sizes and property values since lockdown restrictions were eased. The banks are currently working through a backlog of “pipeline mortgages”, but they are also taking on new customers.

What the lenders are saying

There are plenty more lenders coming to the fore with competitive rates in light of the changing situation. While it may take a little longer for a full range of products to come back to market, it is certainly positive news for the buy-to-let industry.

Like many lenders, Barclays is also currently prioritising existing mortgage applications. In a statement, the bank said: “These changes will ensure we provide a wide range of competitive options for customers whether they are looking to purchase or remortgage, or for existing Barclays mortgage customers who are looking to either rate switch or take further borrowing.”

Lendinvest continued to operate throughout March and April until its latest product renewal, and it is optimistic about the new situation.

Andy Virgo, director of buy-to-let at LendInvest, said: “It is encouraging to see the housing industry start shifting safely back into gear this week, and the team are primed and ready to hit the ground running with this new refresh to our product range.”

“As a lender that has remained open for business over the last couple of months I am confident that we are in a uniquely advantageous position to best serve our customers as valuers return to work, all whilst staying alert to the evolving crisis-environment.”

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