Kensington Mortgages is reviewing its buy-to-let proposition after its buy-to-let business volumes dropped last year.
Landlords have been hit by measures such as the 3% stamp duty surcharge, stricter underwriting rules and mortgage tax relief.
Craig McKinlay, sales and marketing director at Kensington, said: “We’ve seen our buy-to-let business volumes down generally but we’re reviewing our product range now to keep pace because there’s been so many changes in the last six months.
“Since the changes came in last September the market has changed completely. We’ve got some changes coming in the next couple of months designed to make sure we can serve all areas of the market correctly and making sure we’re competitive.
“It’s never been the biggest part of our business but it’s an important part. There’s so much change so we’re looking at our proposition, making sure it’s up to date.
“We’re making sure we know where landlords are going in the next few months, we have the right set of products and instead of looking back, we’re looking forward to the future.”
In February Kensington started looking at portfolio top ups by allowing landlords with excess income and a good portfolio, but lacking the cash, to use that to offset the income coverage ratio required to get a mortgage on a new property.
McKinlay added: “So much of buy-to-let is around affordability hurdles and how you deal with that. It allows you to look at all the cash in the portfolio so if you have some properties that do really well you can offset it.
“That’s hopefully is going to help us because we know there’s some landlords struggling on the properties they’re buying in terms of hitting the 145% of the mortgage rate.
“So we’ll allow them to reduce that if they’ve got spare income of their portfolio. It’s about that flexibility and common sense underwriting we do because we manually underwrite.
“If you’re high earning and have lots of outgoings and if someone can’t pay their rent for a while or get a void they can pay out of their own income, so we help customers get to those by taking a full view of the customer and those incomes.”
McKinlay said that Kensington made up for the drop in buy-to-let business drop with self-employed customers.
It identified the self-employed and light adverse as growing markets.
About half of Kensington’s business comprises of self-employed customers with about half of its buy-to-let customers being self-employed too.
It looks at the self-employed, those with light adverse conditions and high earners who typically have complex incomes because they might have different income streams such as a salary, bonus, dividends and property income.
McKinlay said: “The self-employed market is growing. It’s one of the impacts from the last credit crunch where many people lost their jobs and then started their own businesses.
“We’ve grown really strongly the last couple of years. The specialist market has been growing 25% to 30% last year and we’ve been keeping pace with that.
“We’re trying to get into the niches where the high street struggles, using specialist underwriting skills to look at the specialist, more complex cases.”