Following the introduction of the temporary stamp duty holiday, Buy-to-Let (BTL) lenders have returned to the market or expanded their offerings, giving potential property investors more choice of who to lend from and what product to use.
That's good news for those who are interested in entering the world of BTL investing and those with a mind to expand their portfolio. However, there are also signs of caution as others make small adjustments to reduce their risk Levels.
Evidence suggests that BTL investors are interested in taking advantage of the temporary stamp duty discount and some lenders are working to accommodate that, albeit with an air of prudence. However, with mortgage approval figures rising, it appears the Chancellor’s move should help stimulate activity and boost government income at a time when the economy desperately needs some extra support.
BTL Mortgage Options Increase
When the spread of the coronavirus pandemic led to a nationwide lockdown and people being furloughed or even losing their jobs, a number of mortgage lenders stopped taking on new clients and even withdrew certain products.
Now that the economy is once again open for business, including incentives to spur different sectors forward, some of those lenders who halted business or withdrew some mortgages have also re-opened.
Specialist lender Vida is among those who stopped taking on new BTL customers but have now re-launched their products. As well as offering a range of BTL mortgages up to 85% among other specialist products, the lender has a complete guide to mortgage lending during Covid-19 and has also put some measures in place to support existing customers still furloughed due to the pandemic.
Foundation Home Loans, meanwhile, have re-entered the 80% loan-to-value (LTV) BTL mortgage market, after putting a hold on accepting applications from new BTL landlords. In addition, Accord has once again begun considering first-time landlords for its range of BTL mortgages. However, Accord has also taken the decision to stop considering BTL mortgage applications from clients who have been furloughed.
Other BTL Mortgage Limits
The backdrop for mortgage lending has become more complex amid the pandemic and different lenders are taking their own carefully selected measures to manage the situation. Barclays is another lender who has taken steps to mitigate mortgage lending risks during the pandemic and has reduced its maximum BTL mortgage LTV from 75% to 70%.
This move will allow them to continue lending to BTL investors during what is typically a busy month while also reducing the risk of doing so during an uncertain time. Meanwhile, the lender has also raised BTL mortgage interest rates and withdrawn a product for portfolio landlords.
How long these new measures will remain in place across the BTL lending market will largely depend on a number of factors, including how the economy performs in the second half of the year. However, as some lenders return to the market after a brief hiatus, it's likely there should be enough supply to satisfy the recent increase in demand and that should prove supportive of the country’s economic recovery.