We came across this article today written by Ying Tan, managing director of a leading mortgage packager
We are sure you'll find it very informative.
The buy-to-let sector is on tenterhooks as it awaits Philip Hammond's inaugural Autumn Statement this month. Ying Tan shares his predictions and rounds up recent lender criteria changes.
We’re now just weeks away from the end of the year and while, for most people, focus will now be turning to Christmas festivities and New Year’s Eve celebrations, for the mortgage market – and particularly the buy-to-let sector – there is a much more important date on the horizon. 23 November will see new Chancellor Philip Hammond deliver his first Autumn Statement (and possibly his last if reports about him axing the annual event are anything to go by).
Property professionals and investors will be waiting with bated breath to see if there is anything in the way of good news for the sector – with one possibility being that Hammond scraps or at least changes plans to cut landlord tax relief. Unfortunately I think this is unlikely. This is still a Conservative government and such a huge u-turn would be embarrassing to say the least. Furthermore, the government must have recognised that the sector has already started to react to the changes and a u-turn would cause even more upheaval.
And this brings me nicely on to the market update for this month as Platform has become the latest lender to increase its interest cover ratio to 145% while a stress test of 5.5% will be applied to all applications.
As has been the case for the last couple of months, while lenders are understandably reacting to the tax relief changes and the new rules for underwriting from the Prudential Regulation Authority, they’re also attempting to alleviate the new challenges with attractive rates and incentives.
Pepper announced it would be offering free legals on all remortgages, as well as cutting its buy-to-let rates which now start from 3.58%. Meanwhile, Paragon Premier launched an exclusive five-year fix where interest coverage ratio is 125% @ 4% for single self-contained units and 130% @ 4% for HMOs and multi-unit blocks.
Virgin Money announced rate cuts for selected two and five-year fixed and tracker rates including a two year fixed rate at 75% now with a rate of 2.14% with a £1,995 fee and £500 cashback.
Meanwhile, Nottingham Building Society became the latest lender to cut its SVR by 0.25% following August’s base rate cut.