Loan deals galore – if you’re a landlord
Rents are soaring, mortgages (for some) are hard to find...but for a new
LENDERS’ eagerness to do business with landlords is reflected in a range of attractive new deals and a trend of falling rates and fees.
Virgin Money last week trimmed its two-year fixed rate from 3.99 per cent to 3.79 per cent for landlords with a minimum 40 per cent deposit. There is a £1,995 fee.
And Manchester Building Society raised eyebrows by unveiling rates that can be fixed for as long as 25 years. Borrowers need a minimum 25 per cent deposit and must pay a £749 fee.
After that they can choose either a capital repayment mortgage at 5.74 per cent, or interest-only at 5.99 per cent.
Early repayment penalties apply for seven years, but after that the term can run for up to 25 years – at the borrower’s choice.
David Hollingworth of mortgage broker London & Country says innovative products such as this illustrate that ‘life is being breathed back into the landlord sector’.
Hollingworth says that the proportion of landlord business that the firm does is back at the level of 2007, before the start of the banking crisis.
‘Our typical landlord client is someone with one or two properties rather than large portfolios, and that is the kind of market that many lenders now focus on, as they seek to limit exposure to any one borrower,’ he says.
David Whittaker of specialist broker Mortgages for Business says lending to professional investors with multiple properties is also recovering.
‘Specialist lenders such as Paragon, Aldermore and others are back in play. Landlords are steadily active,’ he says.
Hollingworth says lenders remain picky. Some, like Yorkshire Building Society, will not lend to first-time landlords while others, such as Precise Mortgages, exclude certain postcodes.