Buy-to-let lenders withdraw products, make landlords run out of option

Posted under General by Michael

Landlords looking to re-mortgage are left with no options since buy-to-let lenders have resorted to the withdrawal of good products and started hiking rates in the backdrop of the Bradford and Bingley (B&B) collapse. Nationwide subsidiaries Mortgage Works and UCB were quick in temporarily withdrawing buy-to-let deals following B&B’s retract on it entire range and deals offered by its subsidiary Mortgage Express.

Lenders, NatWest and the Pricipality Building Society, Cheltenham & Gloucester, were still offering buy-to-let deals, but landlords were reluctant to buy due to higher fees, tightened criteria and lower loan values.

BM Solutions hiked its rates from 5.595 to 5.99% for 75% loan-to-value. For 85% loan-to-value it hiked rate to 6.49% from 5.89%.

Andrew Montlake of Cobalt Capital said that borrowers of 85% loan-to-value would be in trouble when their fixed rates would come to an end forcing them in paying standard variable rate till normalcy returned.

According to Melanie Bien of Savills Private Finance, landlords looking to re-mortgage should consult broker 3 months prior to end of their deal. He is anticipating fall in interest rates towards end December leading to reduction in monthly payments for borrowers. He also predicted that majority of landlords would survive in spite of more difficult outlook.