September BTL Update

By:
Madalena Penny

Lloyds Banking Group has announced a change regarding their buy-to-let policy.  In a bid to limit their lending in the Buy-to-Let sector, the group are now only permitting 3 properties per landlord, a stark contrast to their previous lending pattern of 9 properties per portfolio.

In the current economic climate, rented accommodation is increasingly popular making the private rented sector particularly buoyant.  Landlords with properties already funded by Lloyds looking to increase their portfolios are concerned they may have to look elsewhere for further lending.

The Council of Mortgage Lenders reported that Buy to Let lending was up 13% in Q2 of this year with 24,900 mortgages recorded showing a value of £2.4 billion in this sector and which attributed for 12 per cent of all mortgage lending.

While the number of BTL products are still woefully far less than the number available in 2007 (a decline of about 89%), there are still some good deals being offered.

1. The Mortgage Works have 5 loans available at fixed rates.  There one-year fixed is set at a low interest rate of 2.99% with an LTV of 60% and with a fee of 3.50%.  Their two-year fixed is at 3.49% with a 70% LTV and again a 3.50% fee.  Another package they offer is again two-year but fixed at 5.94% with a 60% LTV but with no fee payable.  Their final fixed rate product is for 3-years at 4.99% at 60% LTV and a 3.50% fee.
2. The Post Office are offering a three-year fixed rate at 6.19% at 60% LTV with no fee.
3. Principality BS have a two-year fixed at 4.89% at 70% LTV with a fee of £999.
4. Godiva’s three-year fixed is at a low LTV of 50% at a rate of 4.49% but with no fee.
5. Yorkshire Bank’s five-year fixed is good value with an 80% LTV and fixed at 80% with a £999 fee.
6. The Mortgage works have some good deals on trackers with their two-year stepped package set at 2.99% (base rate + 2.49% in year one, base rate + 3.74% in year two), with a LTV of 60% and a fee of 3.50%.