Buy to let mortgage lending changes

The specialist buy to let lender Fleet Mortgages has announced it will be slashing its maximum loan amount for buy to let mortgage applications from £1 million to £250,000 this week. The latest reduction from the lender is for products based on the pay rate, which is the rate used by landlords to calculate the sufficient amount of rent needed to cover a mortgage payment.

As it currently stands, landlords can take out a mortgage at 65% loan to value (LTV) of up to £1 million, at a pay rate of 4.09% for a 5 year fix or 3.98% for lifetime trackers. The maximum loan amount has, however, now fallen to £750,000 for those looking for a 75% LTV mortgage when using said pay rates.

Although perhaps leaving landlords in London and the South East with less choice, this is a clear example of the changing criteria heading for the buy to let market next month across the market. Many other lenders are also expected to introduce further changes in order to regulate their business flow, rather than pulling a product range altogether.

Elsewhere in the market, LendInvest has announced it will now be using funds to accelerate its investment and move further into the mainstream buy to let market. As such, the lender is now offering development loans for residential and semi-commercial property projects with rates starting from just 0.92%, as well as bridging loans from 0.65% for residential, commercial and land projects.

LendInvest’s bridging loans are now available from £100,000 to £7.5 million for up to 75% LTV, offering terms up to 12 months with no exit fees. The option to transition from a bridging loan to a bridge-to-let, and finally, a 3 year buy to let, is also available. Development finance is on offer for loans from £200,000 to £7.5 million, for terms up to 24 months at 65% loan to gross development value (GDV).

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