Posts with tag: buy to let mortgages

New Underwriting Standards to Maintain Discipline in Buy-to-Let Mortgage Market

Published On: October 4, 2016 at 9:09 am

Tags: buy to let mortgages,buy-to-let landlords,Mortgage lending,mortgages

The Prudential Regulation Authority’s (PRA’s) new underwriting standards will maintain discipline in the buy-to-let mortgage market, according to Paragon Mortgages, one of the UK’s leading specialist buy-to-let lenders.

New Underwriting Standards to Maintain Discipline in Buy-to-Let Mortgage Market

Paragon has welcomed the PRA’s Supervisory Statement, which will introduce more comprehensive and uniform affordability testing for buy-to-let mortgages.

The standards will introduce new rules to ensure that lenders undertake a thorough assessment of mortgage affordability based on a more standardised review of rental income and property costs, alongside a full understanding of each buy-to-let landlord’s wider economic circumstances.

This will include a requirement for lenders to consider how buy-to-let applicants are affected by the tax changes announced last year, including the Stamp Duty surcharge and reduction in mortgage interest tax relief.

Importantly, the new standards also require lenders to tailor their underwriting approach to distinguish between landlords with small property portfolios of no more than three buy-to-let properties, and those with more extensive and complex investments.

The Managing Director of Paragon Mortgages, John Heron, comments: “As an experienced specialist in the buy-to-let sector, Paragon is already well-aligned with the PRA’s requirements.

“A thorough affordability assessment, together with a full understanding of the characteristics of each property and landlord that we lend to has always been central to our approach and instrumental in maintaining our strong credit metrics.”

He explains: “By requiring a more consistent approach across the market, the PRA should be able to ensure that the strong credit performance of buy-to-let lending is maintained and that lending remains sustainable.

“We would, however, expect these measures to restrict the level of growth in the buy-to-let market going forward, by cutting out more marginal business. We also expect a larger proportion of the market to be specialist in nature, consisting of more professional portfolio landlord business. We believe that Paragon is particularly well placed to capitalise on the opportunities this presents, given its unparalleled experience in this sector.”

Do you believe that the PRA’s new underwriting standards will benefit buy-to-let landlords looking to invest?

Mortgage product availability up by 86% in two years

Published On: September 22, 2016 at 1:35 pm

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,Buy-to-Let,mortgage,mortgage advisors

An new report has shown that during the last two years, there has been a 86% increase in the number of products available to British mortgage advisers.

The survey from Mortgage Brain indicates that a total of 7,481 mainstream lender products are listed on their sourcing systems. This is a rise of 4,031 in September 2014 and up by 49% on the 5,019 recorded at the same time in 2015.

Rises

Buy-to-let mortgage products have seen the greatest rises in availability, with 637 new products emerging in the last year. This total is now 1,853, showing a 52% rise since September 2015.

High loan-to-value products also saw a substantial rise during the last year. Data from the report indicates that there has been a 47% increase in the last twelve months for mortgages up to 90%.

A total of 296 90% LTV products are now on the market for advisors, up from 201 recorded in September 2015.

Mortgages with an LTV of up to 80% also saw a significant increase, with 510 new products coming onto the market in the last year. In all, there are 1,641 products available, showing a 45% increase from the 1,131 available last September.

Mortgage product availability up by 86% in two years

Competition

Mark Lofthouse, CEO of Mortgage Brain, noted: ‘the increase in competition, more buy-to-let lenders returning to the market and an influx of higher LTV products, has clearly had a big impact on the growth of product numbers and availability.’[1]

‘There are over 3,400 more products available now compared to two years ago and this growth in product numbers means that matching a client’s needs to the best products available is more important than ever. The latest Mortgage Brain sourcing systems have over 200 product criteria, which is invaluable to brokers in helping them to best match the needs of their clients to the products available,’ he added.[2]

[1] http://www.propertyreporter.co.uk/finance/number-of-mortgage-products-leaps-86-in-two-years.html

Paragon mortgages announces new buy-to-let fixes

Published On: September 21, 2016 at 11:37 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,interest rates,landlords,mortgages

Paragon Mortgages has today moved to launch a new range of five-year, fixed-rate mortgage products for both individual and limited company landlords.

These new mortgage rates at 75% loan-to-value begin from 3.75%, with the products including funding for both self-contained homes, alongside more complex properties.

Lower interest rates

John Heron, managing director of Paragon Mortgages, observed: ‘with the outlook for interest rates now much lower for longer, we have been able to deliver these longer term fixed rates aimed at professional landlords including those borrowing through limited companies and those purchasing HMO’s.’[1]

‘These are the first products we have launched which feature an ICR that reflects lower interest rate expectations and the reduced risk that customers on longer term fixed rates benefit from,’ he added.[1]

Paragon mortgages announces new buy-to-let fixes

The new longer term fixed rate products include a different interest coverage calculation based on an interest rate forecast of 4%. This is with the interest coverage ratio (ICR) set at a minimum of 125% for single self-contained units and 130% for more difficult HMO properties.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/9/new-five-year-btl-fixes-from-paragon

Brace of providers launch new mortgage deals

Published On: September 16, 2016 at 11:47 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let landlords,mortgage providers,mortgages

A brace of mortgage providers have today moved to launch new fixed rate deals.

Paragon Mortgages and Yorkshire Building Society have announced fresh three and five year deals-the former targeting buy-to-let landlords specifically.

New rates

This morning, Paragon announced their new five-year fixed-rate buy-to-let mortgage for both individual and limited company landlords. Interest rates start from 3.75%.

These fixed rates are available at LTV ratios of up to 75%, with the range including funding for self-contained units, alongside more complex HMO properties.

The new longer-term fixed-rate products include a more revised interest coverage calculation, which is based on an interest rate assumption of 4%. The interest coverage ration is set at a minimum of 125% for single, self-contained units and 130% for more complex HMO properties.

John Heron, Managing Director of Paragon Mortgages, observed: ‘with the outlook for interest rates now much lower for longer, we have been able to deliver these longer term fixed rates aimed at professional landlords including those borrowing through limited companies and those purchasing HMOs. These are the first products we have launched which feature an interest coverage calculation that reflects lower interest rate expectations and the reduced risk that customers on longer-term fixed rates benefit from.’[1]

Brace of providers launch new mortgage deals

Cuts

Meanwhile, Yorkshire Building Society has announced that it has cut selected three and five-year fixed rate mortgages by 0.14%.

These cuts are applicable to three and five-year fixes 65%, 75% and 85% LTVs for both purchase or remortgage.

New three-year fixed rate deals include a 75% LTV at 1.88% and an 85% LTV at 2.03%. Five-year fixes are available from 1.98% at 65% LTV and 2.08% at 75% LTV. Each of these mortgages comes with a fee of £845.

Brendan Gilligan, Mortgage Product Manager for Yorkshire Building Society, noted: ‘we always try to offer our customers a range of mortgage options and good long-term value for money. Our rate reductions will offer borrowers with a range of deposits competitive rates and the security of knowing how much their mortgage repayments will be for the next couple of years, especially during this time of economic uncertainty.’[1]

[1] http://www.propertyreporter.co.uk/finance/paragon-announces-new-five-year-btl-fixes.html

Investec cuts buy-to-let mortgage rates by 1%

Published On: September 8, 2016 at 10:02 am

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,Buy-to-Let,mortgage lenders,mortgages

Investec Private Bank has moved to introduce a new range of loan-to-value (LTV) bands across its buy-to-let mortgage product range. Borrowing rates have been slashed by up to 1%.

The lenders says its new buy-to-let mortgage rates will begin at 2.5%, plus three-month Libor at 50% LTV. In addition, Investec is also launching a 60% LTV from 2.75% and a 70% LTV at 3.10%.

Services

Investec provides both buy-to-let and residential mortgages to people looking to borrow between £250,000 and £10m, with a minimum annual income of £300,000 and assets totalling at least £3m.

Peter Izard, business development manager at Investec Private Banking, noted, ‘despite recent tax changes, the buy-to-let market remains an attractive proposition for investors. We’re delighted to be announcing these significant rate cuts today, which will be a real boost for landlords seeking larger loans.’[1]

Investec cuts buy-to-let mortgage rates by 1%

Alterations

The Bank is one in a number of lenders to cut buy-to-let mortgage rates in recent days, with competition fierce in the market.

Santander cut rates by up to 0.25% on some fixed products, while Virgin Money’s reductions have seen buy-to-let rates at 75% start from 2.19%. Natwest has reduced its standard buy-to-let two year fixed range for both purchase and remortgage by between 19-23 bps. Accord Buy-to-Let also announced plans to expand into the consumer buy-to-let market in the coming months.

Chris Maggs, Accord Buy-to-Let’s commercial manager, noted, ‘despite the uncertainty in the buy-to-let arena we believe that it will remain a robust market.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/9/investec-slash-buy-to-let-mortgage-rates-by-up-to-1

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

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

Author: Em Morley

Categories: Finance News

Tags: buy to let mortgages,buy-to-let finance,buy-to-let hotspots,mortgage,north of England

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

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?