Posts with tag: buy-to-let finance

Buy-to-Let Remains an Attractive Investment Opportunity, Insists Together

Published On: October 24, 2016 at 10:13 am

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Buy-to-let property remains an attractive investment opportunity at a time of low savings rates and stock market volatility, insists specialist lender Together.

Buy-to-Let Remains an Attractive Investment Opportunity, Insists Together

Buy-to-Let Remains an Attractive Investment Opportunity, Insists Together

Despite a Government crackdown on buy-to-let landlords, including the 3% Stamp Duty surcharge on additional properties, the abolition of the automatic 10% Wear and Tear Allowance, and the forthcoming reduction in mortgage interest tax relief, Together reports that investors continue to be drawn to the buy-to-let market, as the returns regularly outperform those of other investments.

The firm’s Commercial CEO, Marc Goldberg, explains: “Buy-to-let has proved to be a resilient sector this year, despite the tax changes introduced by the Government.

“Buy-to-let lending continues to perform well for us here at Together, and we’ve been able to grow whilst maintaining a high quality customer base. Given this growth, we want to ensure that we offer a variety of products to meet the continued demand.”

Together has recently introduced a new five-year, fixed rate buy-to-let mortgage to meet the demand from this growing market, with the maximum loan size increased to £500,000, while offering landlords the opportunity to fix their costs.

Goldberg comments: “Our new fixed rate product, as well as bigger loan sizes, will help us deliver more funding to property investors through our network of broker partners.

“We offer both interest-only and repayment options, with loan-to-values of up to 75%, and we’ll accept projected rental incomes, so landlords don’t need to have a tenancy already in place to secure the funding needed.”

He adds: “We also lend to limited companies and have seen an increase in applications from limited companies for buy-to-let funding as a result of the various tax hikes.”

Under the forthcoming changes to mortgage interest tax relief, limited company landlords will not be affected; only individual investors will face a reduction in the amount of mortgage interest that they can offset against tax. The Government has a guide on how the cut will work: /government-guide-tax-relief-changes-residential-landlords/

Together recently announced record trading results, with annual new lending for the year to 30th June 2016 surpassing £1 billion for the first time in the firm’s 42-year history. Its current loan book exceeds £1.8 billion.

Buy-to-Let Lending Up by Almost 40% Over the Past Year

Published On: September 13, 2016 at 1:36 pm

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Buy-to-let lending has risen by almost 40% over the past year, defying new Government measures to curb investment in the private rental sector.

Buy-to-Let Lending Up by Almost 40% Over the Past Year

Buy-to-Let Lending Up by Almost 40% Over the Past Year

According to the latest figures from the National Association of Commercial Finance Brokers (NACFB), buy-to-let has had a very strong year, despite the various tax changes that have been announced over the past 18 months.

The organisation found that landlord borrowing has not been materially affected by April’s Stamp Duty hike, when the 3% surcharge for buy-to-let investors and second homebuyers was introduced.

Almost £5 billion worth of business was written by NACFB for buy-to-let landlords in the year from July to June, marking a 39.1% increase on the previous 12 months.

Alongside the Stamp Duty surcharge, landlords have been faced with the 10% Wear and Tear Allowance cut and forthcoming restrictions to mortgage interest tax relief.

The body also reports that small business lending has hit an all-time high over the past 12 months, despite a backdrop of political and economic uncertainty surrounding the EU referendum. Lending has risen by almost 30% to reach £20.7 billion.

However, while traditional forms of lending – such as commercial mortgages – have had an impressive 12 months, lending in the alternative finance space, which includes peer-to-peer and crowdfunding, has slowed. Business written by NACFB brokers over the last year has dropped by 14.4%, down from £848m to £725m.

Despite this, other areas have also experienced strong growth, including invoice finance (22.8%), leasing and equipment finance (10.5%), development finance (49.8%) and bridging finance (74.6%).

The organisation’s Adam Tyler comments: “It’s been a phenomenal and record breaking year across the commercial finance sector. With the UK’s SME community showing a real appetite for growth, despite the uncertainty of Brexit, we have seen small business lending at levels above even those registered before the financial crash.

“Interestingly, the figures show that there has been a significant switch by small businesses back to traditional forms of lending. The alternative finance sector has grown at such a pace that it was inevitable that rate of growth couldn’t be sustained. Peer-to-peer will always have its place, but alternative forms of funding are no longer the only future; they are just one of many forms of finance available to small and medium-sized businesses.

“There has never been a better time for businesses to secure finance, as the commercial finance sector continues to innovate and diversify. The challenge is to make sure the message reaches SMEs that there are many routes to funding.”

Landlords, have you continued to invest in buy-to-let this year, despite the tax changes you face?

Buy-to-Let Lender Expands Sales Team in North of England

Published On: September 5, 2016 at 9:33 am

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Buy-to-let lender Foundation Home Loans is continuing to expand its sales team in the north of England, confirming the strength of the property market for landlords.

The firm has recently appointed Joanna Elton as the Regional Account Manager for the north of England.

Buy-to-Let Lender Expands Sales Team in North of England

Buy-to-Let Lender Expands Sales Team in North of England

Elton will take on responsibility for building key partnerships with Foundation Home Loans’ distribution partners in the north, working under the Business Development Director, Paul Brett.

Elton has a host of experience in the mortgage industry, after starting her career at Mortgage Trust as a New Business Administrator. She moved into account management when the company rebranded as First Active.

Her career then took her to Kensington Mortgages and Scottish Life Mortgages, where she stayed for a few years, before moving onto Mortgage Next as a Regional Account Manager for five years.

In 2010, Elton joined Sun Life as a Regional Account Manager, before moving to London and Colonial, and then Curtis Banks. Before her appointment at Foundation Home Loans, Elton was a Business Development Manager at Mortgage Intelligence.

Brett comments: “Joanna brings with her a strong background in business development and relationship management, and we are delighted to have her on board. Her role will be to enhance existing distribution partner relationships as well as maximise the opportunities for new business and develop fresh sources.

“We have identified that the buy-to-let market in the north of England holds particular opportunities for landlords and their advisers. Joanna is an ideal ambassador for Foundation Home Loans’ buy-to-let proposition.”

Landlords looking for new investments may find that the north of England is offering strong capital growth in the current market, as house price rises outpace London for the first time in years. Recent research by Hometrack also suggests that growth is showing no signs of slowing down.

In addition, a new study from Property Partner insists that cities in the north of the country are offering the highest yields for landlords of student properties.

Is the north of England proving a buy-to-let hotspot for you?

Dudley Building Society Updates Buy-to-Let Range

Published On: September 2, 2016 at 8:32 am

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Dudley Building Society has released its latest set of updates for its buy-to-let range, featuring new products, comprehensive rate reductions and improved criteria.

Dudley Building Society Updates Buy-to-Let Range

Dudley Building Society Updates Buy-to-Let Range

The society, which announced strong annual results for the 2015/16 financial year, with pre-tax profits of £1,335,000, is responding to a buy-to-let sector that “needs encouragement”, according to the firm’s Head of Credit, Jonathan Moore.

The updates include a reduction in interest rates across all products, with all fixed rate products cut by 0.30%. Rates now start at just 2.99%, with products now including options with no Early Repayment Charges (ERCs).

Dudley has also introduced brand new three and five-year discount products, with a maximum ERC period of three years.

The majority of products now carry a new maximum borrowing value of £1m, up from £500,000, while the minimum income required has been reduced to £20,000 per application.

In addition, Dudley’s stressed rate calculation has been simplified, through the removal of separate requirements for flats. Loan-to-value (LTV) requirements on background residential property have also been cut.

Moore says: “Landlords have been in the firing line over the past 12 months because of the Stamp Duty changes and, with the tapering effect on tax relief due to start in 2017, it is important that lenders like the Dudley do everything that we can to provide the kind of products that offer value, flexibility and a common sense approach to underwriting buy-to-let mortgages.

“Therefore, our partners will be pleased with the overall reduction in rates, some of which start from 2.99%. We have introduced new three and five-year discounted products, as well as options which have no ERCs. Dudley Building Society continues to lead the way by working exclusively through intermediaries and being among the first to abolish upper age limits for applicants. On top of which has been our commitment to manual underwriting and a holistic approach to every enquiry, which has given us a deserved reputation for the kind of service that brokers require for their customers.”

Do these new updates encourage you to invest further in the buy-to-let sector?

Buy-to-Let Lending Continues Recovery, but Borrowing is Still Down

Published On: August 11, 2016 at 10:03 am

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The buy-to-let lending market has continued its recovery, but borrowing is still down in the sector, according to the latest Council of Mortgage Lenders (CML) report.

Buy-to-Let Lending Continues Recovery, but Borrowing is Still Down

Buy-to-Let Lending Continues Recovery, but Borrowing is Still Down

The study found that buy-to-let landlords borrowed a total of £2.9 billion in June, up by 12% on May. However, the value of these loans was significantly lower than the volume recorded in June last year.

The amount of landlords purchasing property has fallen substantially since the higher rate of Stamp Duty was introduced at the start of April, as reflected by a 15% annual decrease in lending to buy-to-let investors in June. However, the CML claims that this decline was caused by a boost in the market ahead of the Stamp Duty deadline.

The Director General of the CML, Paul Smee, says: “Buy-to-let house purchase activity remains lower than before the Stamp Duty changes at the beginning of April, but showed a large month-on-month increase. As might be expected, buy-to-let remortgage seems to have been less affected by the changes and remains consistent with lending last year.”

But while many buy-to-let landlords have been deterred by the tax changes, first time buyers are taking advantage of less competition from investors in the property market.

First time buyers borrowed a collective £5.5 billion in June, up by 28% on May and 25% on June 2015. June’s figure represents the greatest volume of loans for first time buyers since August 2007.

Overall, mortgage lending in June was up by 29% on the previous month, and 12% year-on-year.

The Director of London estate agent Greene & Co., Stephen Matthews, believes that property purchase activity has remained fairly robust, despite wider uncertainties in the market.

He explains: “The data shows first time buyers continue to be a driving force in house purchase lending, outperforming home movers for the third month running and up 25% annually. Nevertheless, the number of home movers has risen by a healthy 5% year-on-year, despite Brexit jitters and the accompanying uncertainty surrounding future economic stability.

“Buy-to-let house purchase activity still remains lower than before the changes to Stamp Duty at the beginning of April, which has had a bigger impact to annual lending than the EU referendum. However, it is clearly evident that private landlords are beginning to return to the market, as we see a large month-on-month increase.”

The findings arrive as recent data from LSL suggests that a drop in property transactions was caused by the Stamp Duty changes, rather than the Brexit vote.

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

Published On: August 9, 2016 at 10:34 am

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Accord Buy to Let has reduced rates on its entire fixed rate buy-to-let range by up to 0.3% and has launched new remortgage options on its three and five-year fixed rate products.

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

Accord Cuts Rates on its Entire Fixed Buy-to-Let Range

The new buy-to-let range from the Yorkshire Building Society Group’s intermediary-only lender includes a new two-year fixed rate deal at 1.94% with a £800 fee available to remortgaging landlords at 60% loan-to-value (LTV), with a free standard valuation and standard legal fees included.

Accord Buy to Let is also offering a three-year fixed rate product at 2.64% at 65% LTV, with an £800 fee. The mortgage comes with £500 cashback on completions for landlords expanding their portfolios, along with a free standard valuation and standard legal fees for remortgages.

The lender has also updated its five-year remortgage deal, available at 3.09% at 60% LTV, with the same £800 fee and a choice of either a free standard valuation and £300 cashback on completions, or a free standard valuation and standard legal fees.

The Commercial Manager at Accord Buy to Let, Chris Maggs, comments: “We have reduced rates across our entire fixed range to ensure we are offering competitive options to suit all circumstances.

“We also hope the added incentives such as cashback on completion and free standard valuations will prove popular with brokers and landlords looking to get the most from a mortgage.”

Many landlords will be seeking the most competitive buy-to-let mortgage deals at this time, as they face tax hikes and new regulations.

As of 1st April this year, landlords must now pay an extra 3% in Stamp Duty when they purchase a rental property.

In addition, the amount of tax relief that landlords can claim on their mortgage interest payments will be cut from April next year. The change will affect many landlords, as it may push some investors into the higher tax bracket.

Furthermore, landlords must be aware of forthcoming legislative changes regarding energy efficiency. From 2018, all rental properties must have an energy efficiency rating of E or above. One investor has spoken out insisting that the Government should support landlords with these costs.

Take a look at Accord’s updated range to see whether investing further into the buy-to-let sector is viable for you.