Options and products in the buy-to-let mortgage space are broadening, with more lenders expanding their ranges for landlords.
Just this week, four major lenders operating in the buy-to-let mortgage sector have announced additional products, lower rates and special deals for landlords, opening up more options for UK property investors.
With confidence levels taking a knock over the past couple of months as interest rates have crept up, the announcements are likely to bring some relief to landlords operating in the market. While there is still some uncertainty as to how high rates could go, the latest correction is certainly welcome news.
Lower buy-to-let mortgage rates
Vida has reduced its rates for both buy-to-let and residential mortgages by up to 1.2%. Its buy-to-let mortgages are available up to 80% loan-to-value (LTV), with the best rate being Vida 48: a five-year fixed-term product at 80% LTV, at 6.29%.
It covers traditional landlords looking for a basic buy-to-let mortgage, as well as specialisms such as HMOs, multi-unit blocks and expats. Vida also offers variable rate products.
Fleet has also lowered its prices across all five-year and seven-year fixed products, for those wanting to lock into a buy-to-let mortgage for a longer period. The new lower rates apply to its 65% and 75% LTV options.
Steve Cox, chief commercial officer at Fleet Mortgages, said: “With these new fixed-rate products we are effectively dropping rates by 70 basis points across the board, and now have a range of five- and seven-year fixes with prices all below 6%, some by a considerable margin.”
Specialist mortgages including HMO, limited company and other options are also available from the lender.
New products broaden buy-to-let mortgage choice
Paragon Bank has added six new buy-to-let mortgage products to its locker, all on fixed rates, and some with a reduced interest coverage ratio rate calculation.
While there are new deals on offer for all landlord types, portfolio landlords in particular are set to benefit from four of the new products in Paragon’s range. Rates start at 5.40%, and a reduced interest coverage ratio (ICR) calculation rate starts at 5.50%.
For smaller landlords with one to three properties, the bank now offers a five-year fixed rate starting at 5.4% on up to 75% LTV. For this loan, the ICR is also set at 5.50%. Paragon caters for HMOs, multi-unit blocks and single, self-contained properties.
Moray Hulme, director for mortgage sales, said: “We’re really pleased to be able to expand our product range and offer more choice to buy-to-let investors with both small and large portfolios.
“Some will find the certainty of our competitively priced fixed rates appealing, especially as the ICR – which we’ve further reduced – should help to make the sums work for more borrowers.”
More green loans for landlords
Green finance has been a huge talking point across both the mainstream and the buy-to-let mortgage space recently. More and more lenders are offering incentives to owners of energy efficient properties within their mortgage products, and it can save money for borrowers.
Skipton Building Society is the latest lender to showcase its new green finance support for landlords, after announcing a new partnership with residential energy efficiency upgrade supplier, Vibrant.
The new offering means all buy-to-let mortgage holders at Skipton will qualify for up to 10 EPC Plus reports on their properties, regardless of how many mortgages are held with the provider. This could potentially save landlords hundreds of pounds, and is expected to be particularly popular as we approach the projected 2025 deadline for rental properties to improve their energy efficiency levels.
An EPC (Energy Performance Certificate) Plus is an enhanced version of a traditional EPC report, which must be carried out on all rental homes. It provides landlords with a guide on how they can achieve the maximum potential rating for a property, and how much it could reduce tenants’ energy bills by.
Kris Brewster, interim chief commercial Officer at Skipton, said: “To have a healthy housing market, we need to support every rung on the property ladder, and that includes people living in rental properties. Landlords play an integral part in housing provision but equally face massive challenges in greening their homes.”