You could be forgiven for thinking the mortgage tax relief changes, announced in 2015 and taking effect from April 2017, marked the ‘beginning of the end’ for buy to let. Prior to this change the private rental sector experienced 125% growth in the number of rental units in a fifteen year period to 2014, according to a report by the CML (2017).
It is safe to say even with these concerns over tax relief changes, which are phased to 2020, there is still a sizeable marketplace and at Ipswich Building Society we’ve continued to help small landlords – with up to three rental properties – to finance their investment. Landlords such as these make up a large proportion of the market, with 60% of UK landlords owning a single rental property.
Half of all rental properties are purchased on a buy to let mortgage, and we have recently seen a surge in enquiries following improvements to our product offering:
- Up to 80% LTV– we’ve increased our maximum loan to value to widen access to borrowers.
- Top slicing for discount rate products– we now offer top slicing and will consider applicants’ personal income for cases not meeting rental cover calculations, on our discount rate products.
- Transitional cases at 125% rental cover– for existing buy to let borrowers with other lenders who are looking for a like-for-like remortgage we’ll apply transitional criteria.
Borrowers do not need to be owner occupiers and for each mortgage application we use expert manual underwriters based at our Ipswich head office, who have many years of experience in looking at all types of mortgage applications – from buy to let, self employed, self builders and more.
We also have no age limit on applications, and will take 100% of pension income into account when assessing affordability. This means for older buy to let borrowers looking to top slice on a discount rate product we won’t cap retirement income.
One of our key product features, and one which intermediaries have told us they value for flexibility and transparency, is our generous 50% fee free overpayment allowance on all products, as standard. Not just limited to buy to let, this is available on all of our mortgage products.
If you have clients who are looking to remortgage or add to their small buy to let holding, and would like to learn more about how we could help, please get in touch.
Contact:
Email: andrewsadler@ibs.co.uk
Tel: 0330 123 1073
