Innovation needed in BTL market

Lenders have already stretched a number of criteria, including rental incomes and loan-to-values (LTVs), as well as adding other features such as top-slicing, in an attempt to help landlords complete property transactions.

catch up with the industry buzz

However, as a higher Base Rate pushes product rates up, lenders will have to be more creative if the deal is to be a viable investment.

Tony Capon, head of intermediary sales at Salt, said: “It’ll be interesting to see what lenders come up with now rates have gone up again. You can only go so far with the rental calculations, especially on 90 per cent LTV with 100 per cent pay rate. If you’re having to call the broker to get the portfolio details before you look at underwriting, you are bringing an extra degree of hassle.”

Download our news ticker

Andy Wiggins, director of mortgage products at Mortgage Express, insisted:

“There has been pressure on rates since January and it is noticeable how many large fee-low rate products there are in the market. Most landlords have taken protection by going for fixed rates but there will be innovation from lenders and further criteria stretching.”

However, Pierre Williams, head of communications at Instant Access Group, believed the market was at the top of the interest rate cycle and landlords had nothing to worry about.

Register for the next forum

“There are no real fears for landlords in the short-term if they are well insulated. House prices rising like they have will provide a cushion.”