Buy-to-let mortgages represent nearly 13% of new UK mortgage lending and are vital in supporting housing supply in the private rented sector.
Whilst remortgaging levels have remained fairly stable, according to research commissioned by The Mortgage Lender, buy-to-let (BTL) house purchase loans fell by 11% during January to March 2018 when compared to the first quarter of 2017. As the private rented sector continues to grow (one in five households in England now rent privately), landlords need flexible and competitive BTL mortgages if they are to continue investing long-term.
In part, this need has been answered by Kensington Mortgages which has announced significant enhancements to its BTL range for landlords in all areas of the market. Supporting landlords in England, Wales and Scotland, Kensington is offering higher LTVs, reduced rates and a wider range of tailored products.
More choice for landlords with HMOs and MUBs
Landlords with houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUBs) have received a boost with the launch of buy-to-let loans up to 75% loan-to-value. Kensington’s rates on HMOs and MUBs start at 2.89% on a 2-year fixed rate at 65% LTV, up to a maximum loan value of £1m.
For standard properties, a 2-year fixed rate buy-to-let mortgage with 70% LTV starts at 2.69%, with a maximum loan value of up to £2m. Kensington will also accept mortgage applications from first-time buyers and non-owner occupiers, as long as one applicant is earning £40,000 or more, plus they have increased the maximum age for applicants to 70 years at the time of application.
Kensington has also expanded its lending criteria to allow personal income or income from other properties to be used in affordability assessments with rental cover from 125%.
Landlords need support to sustain the private rented sector
Due to recent regulatory and tax changes, purchasing a buy-to-let property is more expensive now than ever before, slowing the market especially in terms of entry by new amateur landlords. But with the private rented sector expected to continue growing – according to experts 35.2% of all properties in the UK will be rented out in 2032 – there is an incentive for long-term investment by landlords if there is a competitive buy-to-let mortgage market to support them.
Kensington is the latest lender to expand its BTL product range, and more are entering the market as BTL continues to be seen as a sound investment by existing and prospective landlords. Following a pilot of its service and proposition through the Buy to Let Business and London & Country, mainstream lender HSBC is planning a buy-to-let launch in 2019, providing landlords with greater choice and flexibility to manage their property investments.
