Shifts in lender behaviour gives food for thought

Through our close relationships with lenders we have noticed two important trends in lending over the past month.

1. Lenders cut Buy to Let mortgage rates
With recent government measures, the increase in stamp duty in March and cuts in tax relief, Buy to Let lending has understandably dropped off this month¹. The rush to complete mortgages before April has left lenders looking for ways to entice borrowers back to the table².

Nigel Bedford, Senior Mortgage Manager commented that “Lenders are still keen to maintain their level of lending, so we are now seeing many cutting Buy to Let interest rates and arrangement fees in a bid to capture whatever business they can.” So it’s not all bad news.

Nigel points out that these rate cuts “will benefit those considering remortgaging investment properties, so now is a particularly good time to look at the great options available.”

It is important, however, given the changes in the Buy to Let space and ever stricter affordability criteria³, that Buy to Let investors do look around and seek advice to make the most of this opportunity.

2. Lenders reducing property valuations
The second trend we have noticed is falling property valuations by lenders. This has left some borrowers able to borrow less than they thought.

Nigel Bedford comments that “With the property market softening, we are seeing valuers being very cautious and a number of properties, particularly when remortgaging, being downvalued.”

To avoid finding yourself in this situation there are two things to bear in mind:

• Be realistic – “It is a good idea to ask two or three local estate agents to value your property (which they will do for free) and then take the lowest figure to give a guide as to the value a bank valuer may give.”

• Do your homework – “It is also worth checking the estimated value on Zoopla and updating your property details if they are incorrect, as many bank valuers use this website as one of their reference points.”

If you are looking to remortgage and want to find the best rates, please get in touch.  We have access to competitive semi exclusive rates through our network of lenders. We also have highly experienced mortgage managers who have an extensive knowledge of working with mortgages of £500,000 and above.

1. http://www.telegraph.co.uk/personal-banking/mortgages/buy-to-let-mortgage-rates-are-being-slashed-despite-war-on-landl/
2. http://www.ftadviser.com/2016/03/24/training/adviser-guides/buy-to-let-market-adapts-to-changes-dvKOUDi24p1Jh6XssFITzK/article.html
3. http://www.ftadviser.com/2016/03/24/training/adviser-guides/buy-to-let-market-adapts-to-changes-dvKOUDi24p1Jh6XssFITzK/article.html