This week has been a really positive week for mortgage news and I wanted to share some with you! After the stamp duty announcement last week it really is looking like we are starting to see some shoots of normality.
New lower rates
The market is becoming more competitive again and we are seeing lenders compete in the 75% LTV space which is really encouraging. Precise have dropped their single let limited company product rate to match what Landbay are offering. This is a really positive sign that lenders are back to pushing for business through the door and went to increase their volumes.
We have seen an increase of rates across the specialist lenders since lockdown so it’s really promising to see these rates coming down again.
Moving towards 75% LTV across the board
Since March we have seen a reduction in loan to values with most lenders as they assess the market and the future of property prices. Now we are starting to see that return almost to ‘normal’ which is really promising:
- we can get to 75% (gross) on most bridging cases, including heavy refurbishment where you are funding the refurbishment costs yourself. Where you are borrowing the refurbishment costs then this is restricted to 65% of the GDV, but the initial loan itself is not restricted (as long as there is sufficient profit).
- We can get up to 75% on term limited company mortgages for single let properties with rates as low as 3.54% on a 5 year fixed with specialist lenders (circumstances vary so please speak to us about what we can offer for you), which is as low as we could get to pre-COVID
- We can also get to up to 75% on small (up to 6 bedroom) HMOs on a bricks and mortar value. We have got lender options for this too which is fantastic as we can cater for many clients and their circumstances. We still have hybrid valuation options up to 75% too, although these are more limited for now.
- For large HMOs we can get up to 70% with some lenders. This is great news as we have been a bit restricted in this area previously. I am hoping we will be back to 75% shortly – fingers crossed!
Holiday lets are back
After a few months of uncertainty around holidays in the UK, now that we are allowed to travel, lenders are turning on the tap for holiday lets!
This is great news, especially as I think that the UK will have an increased popularity for holidays moving forward. A combination of people trying out British holidays this year and seeing what amazing places we have, as well as an inevitable increase in cost and apprehension towards foreign holidays over the next few years will mean we need more holiday rentals. I think self contained units will be popular as people want their own safe space, which is great news for investors.
We have a couple of lenders available, one in particular is very appealing. They will lend up to 75%, don’t require any accounts or holiday let experience (as long as you have other investment experience) and will use the market AST rental so there’s no need to demonstrate income you have received for the property.
There are a couple of restrictions so it’s best to speak to us about your circumstances and whether your property fits. The main one is that it needs to be in a location that is suitable for someone to stay for a week. This means it does need to be a holiday location, rather than a city centre.
And we’ve had some planning changes!
Add to all this, the government have announced the relaxation of planning to allow more properties to be converted to residential and extended both out and up.
These changes will come into force in September, so this should increase the number of available properties and allow investors to take advantage of new opportunities. Any refurbishment works that fall under permitted development are easier to complete; they also offer the buyer more certainty over what can be achieved.
As always, if you have any questions then let us know, we are happy to have a chat!