When I wrote my last article, we were all hanging on for Rachel Reeves’ first Budget and the industry was collectively holding its breath to see what was in store.
Almost a month on and we’re able to assess some of the immediate impact. There has certainly been a degree of caution on the part of lenders given the fluctuation of swap rates, and while there have been many positives this month, we have also seen a lot of rates increasing despite the base rate cut.
From a customer point of view, April’s upcoming stamp duty threshold change has resulted in more first-time buyer enquiries as many hope to purchase before this comes into effect.
Landlords remain keen to diversify into sectors such as houses in multiple occupation (HMOs) and semi-commercial in a bid to add higher-yielding properties to their portfolios. It’s been positive to note that ongoing transactions have been largely unaffected by the announced changes as landlords have factored increases into their costs.
So, as we approach the end of the year, let’s take our usual tour of some of the product and criteria updates that lenders have made in the last month to support business through to 2025.
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Recent BTL product changes
Fleet Mortgages has reintroduced its five-year Energy Performance Certificate (EPC) A-C products across its three core product ranges: standard, limited company and HMO and multi-unit freehold block (MUFB).
These products offer landlords a 10 basis point (bps) reduction off the non-EPC equivalent products if the property they are looking to purchase or refinance has the relevant EPC rating.
With a maximum loan to value (LTV) of 75%, these products are priced from 5.04% and are stressed at pay rate.
Vida Homeloans has announced that its maximum loan size for buy-to-let (BTL) applications has been increased to £2m for loans up to 75% LTV across all credit tiers. This applies to all personal BTLs, special purchase vehicles (SPVs), multi-unit blocks (MUBs) and HMOs, and the loan size is inclusive of any fees added to the loan.
Limited-edition BTL five-year products have been reintroduced for both individual units and HMOs/MUBs and are priced from 4.69% (for a standard property in the Vida 36 tier with a 6% fee).
Changes announced to Aldermore’s remortgage criteria mean that landlords can now remortgage between day one and six months of owning the property, with the maximum loan reflecting the current market value up to the standard maximum 75% LTV. The maximum loan was previously based on recent purchase price (plus improvement costs).
The change will potentially allow landlords to get a better deal and increase equity.
Santander has made some changes to affordability rates. The standard rate has decreased from 7.31% to 7.15%, while both the five-year fixed rate and pound-for-pound remortgage rates have decreased from 5.31% to 5.15%.
Buy to Let by Foundation has launched an F2 limited-edition holiday let five-year fixed product. With an initial rate of 6.24%, this product is available up to 75% LTV with a 2.25% fee and maximum loan of £2m. It will suit portfolio and non-portfolio landlords with an almost clean credit history who are looking to either purchase or remortgage.
Kensington Mortgages has released five-year BTL prime special rates up to 75% LTV. The rates are available for both existing and first-time landlords, including limited companys with up to four directors/shareholders. Prices start from 4.49% for a five-year fixed up to 70% LTV with a 5% completion fee.
The 75% LTV specials are priced from 4.64% with a 5% completion fee. Other fee options are available.
Landbay announced a series of rate cuts of up to 0.2% on its two- and five-year fixed options in its standard, automated valuation model (AVM) and non-portfolio ranges. The reductions include a two-year fixed BTL in the standard and AVM ranges up to 75% LTV, priced at 3.79% with a 6% fee, and a five-year fixed in the non-portfolio and AVM ranges up to 75% LTV. This is priced at 4.59% with a 6% fee.
Updates in the specialist resi space
Turning our attention to some specialist residential changes, November saw Pepper Money making enhancements to its concessionary purchase criteria. Available for purchases from landlords as well as family, the lender will now be offering 100% concessionary purchase.
This enables customers (including tenants) to purchase a property below market value and borrow up to 100% loan to purchase price, with no deposit required, up to a maximum of 75% LTV of the full market value.
West One made significant changes to its residential mortgage product range, including the introduction of two brand products – Premier and Platinum – to replace its current higher LTV products. There are also improved eligibility criteria, up-to-30bps reductions for two-year fixed rates that now start from 6.05%, and the introduction of a fixed lender fee of £1,795 across the range.
Mansfield Building Society has announced the launch of a long-term fixed rate product to its credit repair range. The product offers a fixed rate until 31 March 2030 on loans up to 70% LTV and is priced at 6.39% with no completion fee. It offers enhanced affordability due to being assessed at pay rate. A basic property valuation is included, plus basic legal fees for remortgages in England and Wales.
Bluestone Mortgages has reduced its Right to Buy rates to support those customers who do not fit the traditional lending criteria. Their Right to Buy rates have decreased by 50bps, with rates now starting at 6.24%, bringing them in line with Bluestone’s standard residential rates.
As we now start the gradual wind-down to the festive break, let’s wait and see if the last few weeks of 2024 bring about any final surprises.
