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    An excellent communication has been sent to intermediaries by Paragon Bank in respect of Air Bn B and clarifies some of the possible misconceptions over their funding.

    "Hosts have been welcoming guests into their homes via Airbnb since 2008 and the impact on the UK economy is growing. Last year, for example, Airbnb listings reached 168,000 in the UK and generated an estimated £3.46 billion boost to the economy from a combination of extra income for host households and increased visitor spending in local communities.1

    While Airbnb has the potential to take a landlord’s rental business in a new and exciting direction, there’s often initial confusion amongst would-be hosts about whether their existing mortgage covers this type of short term letting.

    Here, we answer some of the most frequently asked questions on Airbnb mortgages to help landlords get to grips with the facts. Can landlords use a standard buy-to-let mortgage to finance an Airbnb property?

    Landlords should always check with their lender before becoming an Airbnb host to make sure this is allowed under their mortgage conditions. Each lender offers a range of different mortgage products and not all products will allow customers to rent out their property on Airbnb.

    At Paragon, landlords who want to let out a property on Airbnb will need to apply for a holiday let mortgage.

    Paragon introduced holiday let mortgages into the product range in November 2018.

    Importantly, when a landlord applies for a holiday let mortgage with Paragon, they don’t specifically have to say that they are intending to use Airbnb but they should have checked first that Airbnb hosting is allowed by their local authority and, if relevant, their freehold agreement.

    If a landlord has a buy-to-let mortgage or a residential mortgage with another provider, they should also check their mortgage conditions to see if Airbnb letting is allowed. If they’re in any doubt, give the lender a call and ask them to clarify the situation. Likewise, if they’re searching for a new mortgage product, they should confirm their intentions for the property and clarify whether Airbnb lets are accepted. What type of information will mortgage lenders want to know?

    Again, this will depend on the lender.

    At Paragon, for example, we’ll want to check the proposed property is a single, self-contained unit and that it will be let under an approved holiday occupancy agreement for a maximum period of one month at a time.

    We’ll also want to consider mortgage affordability. One way that landlords can demonstrate affordability is through holiday rental income. However, at Paragon, we’ll also want to know that the mortgage would be affordable if the tenancy was let on a standard Assured Shorthold Tenancy (AST). If Airbnb doesn’t work out, can landlords convert their mortgage back to a standard buy-to-let property?

    Airbnb won’t work out in every case. Higher cleaning and support costs or more frequent voids may mean the economics are not attractive in practice. If this happens, some lenders, including Paragon, allow landlords to revert to letting on a more standard AST.

    As Paragon mortgages are only available via Intermediaries I would suggest you make contact with your advisor for more information on their Holiday Buy to Let loans and other offerings within the market.


      An article which has appeared in Mortgage Strategy

      Buy-to-let purchases drop 8% as tax changes bite: UK Finance

      The number of buy-to-let mortgages used for purchasing new properties fell by nearly 8 per cent in February compared to the same month last year, according to the latest UK Finance figures.

      The trade body says that only 4,800 BTL purchase loans completed, compared to 5,200 in February 2018.

      The value of these mortgages for landlords was £600m, down slightly from £700m a year earlier.

      UK Finance says that “while BTL house purchases continue to contract due to tax and regulatory changes, BTL remortgaging has increased as borrowers move from fixed rate mortgages and lock into new attractive rates”.

      Its figures show that 14,400 BTL remortgages completed in February, up 2 per cent from 14,100 in the same month last year.

      The value of BTL remortgages was £2.3bn, up from £2.2bn a year earlier.

      The number of mortgages for first-time buyers rose by 4 per cent year on year to 24,880 while the value of these loans rose by 6 per cent to £4bn.

      There were 18,200 new remortgages with additional borrowing in February 2019, 10 per cent more than in the same month in 2018.

      For these remortgages, the average amount taken out in February was £52,000.

      There were 18,360 remortgages for borrowers who did not want to increase their loan size, a rise of nearly 8 per cent on the same month last year.


        Also after the banking crisis in 2008 , some property home owners could not find buyers and to avoid selling at a loss, became BTL owners.

        Since property prices have now recovered during past 10 years under low interest rates , most of those BTL owners are now able to exit with a profit.

        Since loan interest is no longer allowable as an expense against rental income for owners on higher tax rates , some owners will decide to quit the rental business.


          Lenders are adjusting rates in an attempt to stimulate increased volumes

          I have noticed that in the last 7 days a number of main stream lenders announcing cuts to BtL mortgage rates and some instances the amount of fees being levied, this supports my understanding that the volumes of new BtL applications have continued to fall and those affected are seeking to gain advantages to stimulate new business . Nat West, Paragon, TMW are amongst the leaders making such announcements.


            An interesting article appeared in the Trade Press using data from Property Solvers , for those Forum readers with property in London & South East this confirms what we have experienced on mortgage valuations irrespective of whether it is a Home Owner or Buy to Let application.

            South East houses largest disparity between asking and selling price

            The South of East of England is where the biggest discrepancies between asking and selling prices lie, according to data collected by Property Solvers.

            Within the region, South West London has the largest difference, at £85,142. This is followed by North West London at £80,299, and West London at £59,192.

            Property Solvers points out that the only area in the top 20 of this list is Inverness, in Scotland, which has an average gap of £18,860.

            Scotland is where the three narrowest disparities are: Perth, at £1,930, then Kilmarnock at £2,256, followed by Motherwell at £2,653.

            The data was collected from 89,582 property transactions between June 2018 and June 2019.

            Property Solvers co-founder Ruban Selvanayagam says: “Whilst it is logical to expect a bit of wiggle room, it is increasingly evident that something is amiss in the marketplace and properties are getting overpriced at the marketing stage.

            “It is common knowledge in the industry that estate agents frequently provide prospective home sellers with an over-hyped valuation to win instructions.

            “In many cases, this leads to homes lingering on the market for much longer than they should.”


              Over the past month lenders have gone against the trend in market rates by reducing Fixed Rates on Buy to Let including niche lending sectors like HMO’s and Limited Companies, one must assume that this move coupled with the increase in calls to its appointed brokers suggests that there is a significant push to increase their respective share of new / Remortgage business is available. If anyone is contemplating making a purchase or seeking refinance then I would strongly suggest you speak with your mortgage advisor.


                Originally posted by loanarranger View Post
                one must assume that this move coupled with the increase in calls to its appointed brokers suggests that there is a significant push to increase their respective share of new / Remortgage business is available.
                Can't you just ask them rather than assuming? Their annual reports will show it anyway so its hardly confidential information.
                My assumption would be they are simply fighting to maintain the existing business levels they have.


                  Such questions are indeed asked when meeting the Regional Managers but one seldom gets the truth.
                  Having been a lender for over 50 years one is always conscious of having to give the impression that business is indeed good and not to communicate any negatives, that is particularly pertinent to representing PLC’s where any admission of low business levels could have a negative effect on the share price even though every quarter provisional results are released in briefing notes to City Institutions.
                  i concur with your final paragraph , where lenders have an above SVR and do not offer loyalty switch options they have to rely on originating higher levels of new business , but just like a bag of sand with a hole at the bottom , the loss of sand gradually becomes greater than the level of sand being topped up.

                  i foresee an interesting six months to the end of 2019.


                    I'm seriously considering bringing forward an equity release mortgage I'd planned for 2020.
                    The deals are good and I can't see them being able to improve much further.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


                      I agree that if the rate is fair for you and the reversionary rate etc are good then certainly that should be what is needed to go ahead.

                      Thanks for the responses which seem to be well read but seldom commented on.


                        Originally posted by loanarranger View Post
                        Thanks for the responses which seem to be well read but seldom commented on.
                        It's essential reading, but there's rarely much to say in response.

                        Thanks for the updates, they're a great source of knowledge.

                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


                          Thanks JP.


                            What goes up Can come down

                            An interesting article has appeared today in a Finance Trade publication which may be of interest.

                            Prices almost flat in June: Nationwide

                            Average house prices across the UK were almost flat in June with an increase of just 0.5 per cent on last year to £216,515, while London saw another decline, Nationwide Building Society’s latest index has shown.

                            Prices in the capital were down by 0.7 per cent to £465,722 for the three months to June compared to the same period last year, which was below the previous quarter’s annual fall of 3.8 per cent.

                            But Nationwide points out that London prices are still only around 5 per cent below the all-time highs recorded in 2017 and about 50 per cent above their 2007 levels, while UK prices are 17 per cent higher over the same period.

                            Northern Ireland posted the strongest performance this quarter with an annual increase of 5.2 per cent, bringing average prices to £143,343.
                            In Wales prices rose by 4.2 per cent to £160,407 and in Yorkshire and the Humber prices were up 3 per cent to £158,780.
                            Nationwide chief economist Robert Gardner says it was the seventh consecutive month in which UK annual house price growth remained below 1 per cent.

                            He says: “Survey data suggests that new buyer enquiries and consumer confidence have remained subdued in recent months. “Nevertheless, indicators of housing market activity, such as the number of mortgages approved for house purchase, have remained broadly stable.”

                            He adds: “While healthy labour market conditions and low borrowing costs will provide underlying support, uncertainty is likely to continue to act as a drag on sentiment and activity, with price growth and transaction levels remaining close to current levels over the coming months.”

                            Garrington Property Finders managing director Jonathan Hopper says: “London’s market is turning into a supernova. After years of burning with stellar brightness, its slowdown is now exerting a gravitational force on the national average.
                            “That gravity has even turned the South East’s markets inside out – with the outer London boroughs and the commuter belt now suffering the sharpest price falls while central London values settle.”

                            But he says the price correction is prompting increasing numbers of buyers to take the plunge, providing a boost to activity.
                            He adds: “From a price point of view, the national picture is getting more polarised, not less.
                            “In the weakest markets we’re seeing homes change hands for as much as 30 per cent below guide price, while in the hottest areas, premiums being paid over guide price are not unusual for the most sought-after homes.
                            “In the Southeast, what sellers there are tend to be those who have no choice but to put their home on the market – and as a result many are having to recalibrate asking prices or accept low offers.”


                              Buy-to-let mortgage rates have fallen as the choice of products has grown, research claims.

                              Analysis of the deals on offer from lenders including Barclays, BM Solutions, RBS, The Mortgage Works, Godiva and Precise found the average rate on a £150,000 buy-to-let mortgage has dropped across both short and long term periods.

                              The research, by online broker Property Master, shows the biggest fall in the monthly cost was for five-year fixed rate buy-to-let mortgage at 75% LTV, which fell by £36 in one month.

                              Five-year fixed rates for 65% LTVs also fell by £6 per month.

                              Two-year fixed rate buy-to-let mortgages for 50% and 65% of the value of a property fell by £5 each, while those at 75% LTV were down by £8 per month.

                              Angus Stewart, chief executive of Property Master, said: “We have been tracking buy-to-let mortgage interest rates in this way for 18 months and we have never seen before a fall across the board in this way.

                              “It is quite unprecedented. [In June] we saw a drift upwards in the cost of buy-to-let fixed rate mortgages but it may be that the market is now expecting rates generally to fall rather than rise.”

                              “It is likely that lower rates are also being fueled by the continuing increase in the number of buy-to-let mortgage product

                              “Whilst it is true some lenders have exited the market others are boosting their range and competing hard for new business.

                              “As landlords continue to be pressed on all sides by rising regulatory cost such as the new Tenant Fees Act and falling tax reliefs, today’s news of a lowering of mortgage costs will be very much welcomed.”

                              It comes after Moneyfacts reported that thenumber of buy-to-let mortgages on the market had hit the highest level since 2007.


                                I have brought forward my funding!
                                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).


                                Latest Activity


                                • Mortgage News
                                  by loanarranger
                                  The following article has appeared in one of the Mortgage Trade journals reporting on views expressed by the Association of Mortgage Intermediaries an influential trade body within the mortgage industry.

                                  "Mortgage rates are likely to rise in the first quarter of 2016 as lenders look...
                                  23-12-2015, 19:43 PM
                                • Reply to Mortgage News
                                  by loanarranger
                                  The market continues to change and not for the better judging from the following lender announcements.

                                  Lenders who have paused accepting new mortgage applications:
                                  • Clydesdale Bank are not currently accepting new Purchase applications on either Residential or Buy to Let
                                  • Virgin Money
                                  06-04-2020, 20:38 PM
                                • Reply to Mortgage News
                                  by loanarranger
                                  HSBC have announced a system of restricting the daily acceptance of new mortgage applications and for the present have stopped the acceptance of maximum LtV applications ( 95%)
                                  06-04-2020, 18:25 PM
                                • Reply to Landlord - Tenant financial hardship due to coronavirus
                                  by The Secret Landlord
                                  Have your tenants lost their job? It is not clear why they will be in hardship? Have they done a budget? Gone through all outgoings?

                                  It's important for people to really get a handle on their finances and understand what the real issues are right now.
                                  06-04-2020, 07:07 AM
                                • Landlord - Tenant financial hardship due to coronavirus
                                  by Matthew_Wilde
                                  I am really struggling to get any advice so wondered if anyone on here could point me in the correct direction, please?

                                  I have one rental property which has a Barclays buy to let mortgage. The tenants have been in the house since I first let it - over 5 years. They have always paid on time...
                                  25-03-2020, 14:21 PM
                                • Reply to Mortgage News
                                  by loanarranger
                                  Here is an extract from a briefing note on amended lending criteria from Nat West and Nationwide for those affected in employment terms ( Furloughed) and who are applying for a mortgage.

                                  Nationwide and NatWest have outlined their affordability criteria for people impacted by the Covid-19...
                                  03-04-2020, 12:18 PM
                                • Reply to Mortgage News
                                  by loanarranger
                                  Bluestone Mortgages , a relative new comer to the niche end of lending via the Intermediary channels have this morning withdrawn from accepting any new mortgage applications.

                                  Any existing applications which are either in the course of being processed or pending completion will proceed to...
                                  03-04-2020, 10:04 AM
                                • Reply to Bank of England rate drop?
                                  by loanarranger
                                  I think that for the next few months , attention should be made regarding what products are indeed available for specific loan to Values irrespective of whether it is a residential mortgage or BtL.
                                  As I have posted in recent days , lenders have become cautious on the loan to Values , the exclusion...
                                  03-04-2020, 09:56 AM
                                • Bank of England rate drop?
                                  by Diversity
                                  Is the BOE going to drop interest rates from 0.25 to 0.1 ? And are all UK banks mandated / legislated to pass onto the drop / savings to mortgage customers?

                                  Is there any difference in the way they are treating home owner vs rental mortgages?
                                  19-03-2020, 09:46 AM
                                • Reply to Bank of England rate drop?
                                  by bilbobagg
                                  You can argue that it's 'technically' negative already if you look at the inflation rate vs the interest rate.
                                  Bearing in mind that inflation rates are heavily massaged in order to exert downward pressure on them so we don't get too annoyed and start burning things....
                                  03-04-2020, 08:32 AM