Mortgage News

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    A very shrewd move JP. Strike whilst the iron is hot.


      Just worked out that the total payments on 5 properties will be lower than the payment on 4 properties three years ago.
      That's been some drop in rate, given that there's more than 25% more being funded.
      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).


        BM Solutions have announced that providing an applicant owns no more than 10 BtL properties they will now consider up to a maximum of 5 properties in mortgage with BM Solutions within the Lloyds Bank Group. Certain conditions in aggregate borrowings will apply.
        As a broker I consider this change to be long overdue but very welcome as I am sure will borrowers who had possibly been restricted to 3 properties.


          Originally posted by loanarranger View Post
          BM Solutions have announced that providing an applicant owns no more than 10 BtL properties they will now consider up to a maximum of 5 properties in mortgage with BM Solutions within the Lloyds Bank Group.
          I wonder how they have come up with these seemingly arbitrary numbers?

          Why the jump from 3 properties to 5? What happened to 4?
          Why 10 properties? Why not 11 or 9?
          Why the max lending increase from £2M to £3M? Why not £2.8M or £3.1M?

          The Lloyds/HBOS group is huge, this seems to me a one size fits all, computer says "no" type announcement.


            Originally posted by loanarranger View Post
            BM Solutions have announced that providing an applicant owns no more than 10 BtL properties.
            Point to note, it is no more than 10 mortgaged properties (arbitrarily irrespective of low LTV's). Unencumbered properties are not included in the limit but they are taken into assessment.


              Thanks for providing clarification, I was posting from briefing notes received whilst on holiday in Switzerland.
              As an aside yesterday I had a Boletus Rosti very tasty !


                In response to your original note, I suspect that BM Solutions like the majority of lenders operating in the BtL sector are seeking ways to stimulate further business at a time when the bulk of such applications are Remortgage as opposed to purchase applications. Although a modest increase itis a welcome change to their criteria.


                  An interesting article which appeared in a mortgage trade publication to day with results prepared by BVA BDRC, it does go someway to confirming my previous observations that lenders are increasingly concerned at their apparent failure to generate the levels of applications to enable them to hit the business targets for 2019.

                  Landlords pulling back as only three UK regions see portfolio growth

                  Landlords in just three regions of the UK added to their property portfolios in the last three months.

                  According to the latest quarterly research from BVA BDRC, only landlords in the East of England, Yorkshire and Humber, and London added properties.

                  In all other areas, sellers either outweighed or were equal to buyers.

                  Landlords renting properties to tenants in the East Midlands were the most optimistic about the future prospects for their business, the research found.

                  Half of landlords in the East Midlands said they felt good or very good about their expectations for rental yields over the next three months. Meanwhile one in three reported being optimistic they would achieve capital gains.

                  Landlords pulling back

                  Landlords in Wales, however, were less positive. Fewer than one in three felt good about the outlook for rental yields and less than one in seven saw the potential for capital gains.

                  In the North East, landlords were least likely to rate the outlook for capital gains positively.

                  Landlords in the East Midlands, together with those in Yorkshire and Humber, also achieved the highest reported rental yield at 6.1 per cent, compared with an average for landlords operating across all regions of 5.6 per cent.

                  John Heron, managing director of mortgages at Paragon, said: “Despite the positive picture in some regions, it’s clear landlords are feeling bruised.

                  “All the available data shows that tax changes have driven landlords to pull back from the market and encouraged a sharper focus on yields. This has reduced the stock available to rent and we are now seeing inflationary pressures building in many regions.

                  “The upshot is that tenants are having a harder time finding a good quality home in the sector and having to pay more for it.”


                    Potential Help for Residential Mortgage Prisoners

                    Whilst not Germain to the forum and Landlords , I feel that the following briefing note on possible help to "Mortgage Prisoners" is something which might be relevant to one's family or indeed close friends and provide a degree of assurance that the Financial Conduct Authority is not blind to the situation which is affecting a significant number of borrowers throughout the country.
                    The FCA has set out new rules through its policy statement PS19-27, that are designed to remove the barriers that prevent some mortgage customers from finding a cheaper mortgage deal.

                    The new rules will allow lenders to use a a more relaxed affordability assessment for customers who meet certain criteria, such as being up-to-date with payments under their existing mortgage and not looking to move house, or borrow more than their current mortgage. One of the key impacts of this is that it will make finance available to mortgage prisoners.

                    A mortgage prisoner is someone who has become trapped on a variable rate mortgage with no hope of being offered a ‘deal’ due to their circumstances; this could be due to their employment/income situation or because they have no equity in the home.

                    The regulator is keen to help remove the potential barriers of switching to a more affordable mortgage by amending their responsible lending rules and guidance. In summary, these rule changes now mean that:

                    1. mortgage lenders can choose to carry out a modified affordability assessment (where the customer:

                    a. has a current mortgage; and

                    b. is up to date with their mortgage payments; and

                    c. does not want to borrow more, other than to finance any relevant product,arrangement or intermediary fee for that mortgage; and

                    d. is looking to switch to a new mortgage deal on their current property

                    In addition to this, the new rules mean:

                    2. inactive lenders, and administrators acting for unregulated entities, must review their customer books and develop and implement a communication strategy for relevant borrowers which will include contacting consumers to highlight the rule changes, that they may be able to switch as a result of the rule changes and directing them to relevant information

                    3. mortgage lenders using the modified assessment must tell customers the basis on which their affordability has been assessed and provide additional disclosures about potential risks

                    4. mortgage lenders are required to report which sales have involved the modified assessment when they submit Product Sales Data (PSD) to the FCA

                    These new rules come into force with immediate effect.

                    Eligible customers looking to switch based on the modified assessment are being encouraged by the regulator to check Money Advice Service website.

                    The rules for the modified affordability calculation are written into the MCOB Handbook and there would be too much detail and complexity for us to put them into this briefing paper. In summary, however, the FCA have allowed certain, current, rules to be waived and have put in new provisions that effectively state that, as long as the conditions stated in points 1 a. to d. above are met and as long as the new mortgage is more affordable (based on repayment amounts and interest rates) then the lender can adopt the modified affordability assessment.

                    The rules also, however, state that where a customer is presently on a repayment mortgage the lender cannot use an interest only calculation to make the new mortgage payment more affordable. It has to be on a like-for-like basis.


                      We are now really into the time of year when lenders are keen to build their mortgage pipelines to carry them over the Christmas hump of low business activity.

                      In the last ten days I have identified 9 leading lenders in both sectors of mortgage funding who have either reduced mortgage rates , changed product fees or amended Rental Stress calculations , all designed to give them a potential edge over competitors . Over the final weeks of the year I will publish each Friday examples of changes which I genuinely believe are worthy of consideration best for purchase or remortgage for Buy to Let.


                        Domestic mortgage question - Currently on 5 year fixed that ends in a years time.. Would lenders entertain early renewal at current rates? Is this something they consider?

                        Thanks again, always interesting reading this thread.


                          Thanks for your post, unfortunately 12 months is a little too long for a lender to agree to a Product Switch , there are however a few that offer such facilities within a few months of the present deal maturing: if you would like to disclose the lender either on this page or by Private Message I will gladly check their current attitude to undertaking a Product Switch.


                            As promised here is the market update on the increased number of product / rate changes introduced this week for Buy to Let Mortgages.
                            Accord made changes acrosstheir 2/3/5/7 year Fixed Rates with cash back offerings on certain products, an attractive 1.85% 2 yr fix is available at 75%.
                            Precise and Zephyr made changes with Precise making exclusive deals on Fixed Rate offerings but these are available through their premier packaging brokerages which market through the Intermediary market.
                            Overall it has been relatively quiet compared to previous weeks but clearly alarm bells are sounding judging from the number of calls from business managers enquiring if I had any enquiries which I need assistance with.


                              Slightly off topic but interesting announcement from the Nationwide and which will be implemented within the next two months.

                              Interest-only will be offered through mortgage intermediaries up to a maximum loan to value of 60 per cent.

                              Borrowers must have minimum equity of £300,000 if they live in London, £250,000 in the South East and £200,000 for those living elsewhere in the UK.

                              The exit strategy is restricted to the sale of the main residence only. Part and part mortgages are also allowed, subject to the same criteria.

                              The society has set these parameters to mitigate the risk of future negative equity and to make sure there is a realistic means of repaying the debt at the end of the mortgage term, Mortgage Solutions understands.

                              The minimum income requirement is £75,000, or £100,000 for joint income. There is a minimum term of 25 years, or retirement if sooner.

                              Mortgage Solutions understands this is because Nationwide wants to target the proposition at higher earners who want to use interest-only for flexibility, not because they cannot afford a full repayment mortgage.

                              Henry Jordan, Nationwide director of mortgages, said: “As the UK’s second largest lender, it is natural that we continue to look at ways we can support the mortgage market.

                              “At almost seven per cent, interest-only remains an important part of the market and one we are keen to support by providing access to our standard product range to applicants with good equity and stable income profile.”

                              The launch is expected within the next two months.


                                Gossip amongst market commentators suggest that despite narrowing margins associated with mortgage products lenders are gearing to reveal reductions in mortgage incentive products and those that cannot afford this tactics may amend their underwriting criteria , all designed to try and build a greater degree of momentum in business generation.
                                Today two BtL lenders announced reductions across a number of their products and-one established lender in the residential market made significant adjustments to existing mortgage products.


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                                  Personal Basis:
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