The BTL market turns 30 but activity remains strong – Armstrong
It is hard to believe that buy to let (BTL) has now been with us for 30 years.
The market has certainly come a long way since the first dedicated products launched in September 1996, and today’s landlords are generally more professional, portfolios are more strategically managed and the cases landing on brokers’ desks are often far more complex. Of course, some things never change.
Funding costs and regulation continue to keep everyone on their toes, but it has been encouraging to see lenders responding with a strong mix of new products, broader criteria and more competitive pricing over the last few weeks. So, if you have not had time to work through every lender email, here is my usual whistle-stop tour of some of the changes worth having on your radar.
Rate cuts, criteria changes and product launches
Rely has launched a new limited-edition BTL range, with one-, two- and five-year fixed rate options available at 65% and 75% loan to value (LTV) for landlords of all portfolio sizes. Rates start from 2.85% for a one-year fixed with a 3.5% fee, 3.59% for a two-year fixed with a 5% fee and 4.55% for a five-year fixed with a 7% fee. The new range sits alongside Rely’s existing products, giving brokers a wider choice when balancing rate, fee and affordability for different client strategies.
Landbay has expanded its tracker proposition with 11 new products across its Core, Premier, small house in multiple occupation (HMO) and product transfer ranges. The additions include Premier like-for-like and automated valuation model (AVM) two-year trackers at 75% LTV, with rates starting from bank base rate (BBR) plus 0.34%, no early repayment charges and a reduced stress rate of 4.5% or pay rate. New small HMO tracker and product transfer options have also been added. Alongside the launches, Landbay reduced a number of existing tracker rates by up to 15 basis points (bps), including Core and specialist small HMO and multi-unit freehold block (MUFB) products.
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CHL Mortgages has introduced a new limited-edition range of two- and five-year fixed rates for single dwellings, HMOs and MUFBs of up to six bedrooms or units. Products are available to both individual and limited company landlords up to 80% LTV, with rates starting from 3.6% and a choice of product fees. There are some notable criteria enhancements, too. CHL will now accept first-time buyers, has removed the minimum income requirement for non-first-time buyers, has reduced its minimum property valuation and has increased the maximum permitted height for blocks of flats – including ex-local authority blocks – to 20 storeys.
Pepper Money has launched a new five-year fixed BTL range with a 2% product fee and rates starting from 5.7%. The products add another longer-term option for landlords seeking payment certainty, particularly where the client has a complex income profile, a smaller portfolio or circumstances that benefit from specialist underwriting rather than a standard high street approach.
Marsden Building Society has simplified its expat BTL criteria by removing its minimum income requirement and reducing the documents needed from both employed and self-employed applicants. Self-employed clients now need one year of accounts, or two years where top slicing is used, while employed applicants need only their latest payslip. The mandatory employer reference for BTL cases has also been removed. Marsden has replaced its country exclusions list with an assessment based on current Financial Action Task Force data.
ModaMortgages has introduced a new limited-edition range featuring no application fee and free valuations, including HMOs and MUFBs. Two-year fixed rates in the range start from 4.14% for a single-dwelling property up to 75% LTV with a 5.5% product fee, and from 5.04% for a five-year fixed up to 75% LTV with a 7% product fee. HMO/MUFB rates start from 4.24%.
Turning to fixed rate reductions, Keystone Property Finance has reduced BTL rates by up to 15bps as the lender aims to give brokers more competitively priced two- and five-year options while maintaining different fee structures. Its standard BTL product at 70% LTV is now priced at 3.79%, while expat BTLs start at 5.34% (65% LTV) and holiday lets from 6.04% (65% LTV).
Finally, one to watch for the coming months: Perenna has confirmed plans to launch its own first charge BTL product later this year as it broadens its specialist lending proposition following the integration of Scroll Finance. Product details have not yet been announced, but a new entrant is always of interest, particularly where it could bring additional competition and choice to an under-served part of the market.
