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Growing interest from new investors in BTL market

Interest from new investors in the buy-to-let market is growing, according to Knowledge Bank’s latest tracker results.

The analysis of brokers’ searches in February found intermediaries are working with potential new landlords, and the furlough scheme is still of interest in the residential market.

For the tenth month in a row, buy-to-let brokers reported interest from ‘first-time landlords’, with the criteria reaching the top five, and in February it was the most-searched term by brokers.

Knowledge Bank believes this demonstrates the interest in the rental market from investors, who would normally look to deal in stocks and shares, but are now shifting attention to buy-to-let.

‘First-time buyer’ also featured in the top five most searched for terms by brokers for the second consecutive month.

Looking to the residential market, ‘soft footprint at DIP stage’ returned to the top five most-searched terms after a month’s absence.

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The firm said this suggests brokers are looking for processes that will not impact future applications, due to clients having lower credit scores.

The rest of the top five were unchanged from January, with furlough again top of the searches.

‘Maximum age at end of term’ was again the second top searched term, with older clients looking for finance.

There was also more interest from those who are self-employed, with ‘self-employed – one year’s accounts’ in the top five for the tenth consecutive month.

The second charge market once again saw an interest in managing debt as two of the terms in the top five related to debt management.

In the bridging sector, ‘second charge loan’ was in the top five for the first time since October 2020.

Matthew Corker, operations director at Knowledge Bank, said: “The rental market in the UK is receiving a lot of interest at the moment.

“Perhaps as a result of the volatility in the stock market due to the pandemic, investors are turning to what they see as a safe investment.

“With house prices increasing in the past year and interest in rental properties also on the increase, this trend could be set to continue.

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“However, with the government announcing they would back 95% loan to value mortgages, this may help more first-time buyers onto the housing ladder, and may see less looking to rent in the future.

“The furlough scheme was again at the top of the list for brokers in the residential market, and the latest extension to the job support scheme will undoubtably result in more lenders adjusting criteria.

“The stamp duty extension may bring a raft of new clients to the market. However, they will need to move quickly as even with the extra three months, the deadline is still tight for those who have not already started the process.

“With these latest government decisions, lenders are certain to continue adapting criteria to keep up with the evolving market.

“With changes coming thick and fast, brokers could spend hours every day searching for the latest criteria, so using a comprehensive criteria search system can save them a massive amount of time and ensure they are providing best advice.”

By Jake Carter

Source: Mortgage Introducer

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Foundation Home Loans relaunches for first-time landlords

Foundation Home Loans has restarted offering buy-to-let products for first-time landlords.

Two-year rates start at 2.94% and five-year deals from 3.54%, while the lender has increased LTVs to 75%, including for HMOs and Multi Unit Blocks.

Foundation has also launched a new five-year ‘fixed fee’ product for F1 borrowers, for those looking for larger loans.

The product is offered at 3.84% up to 65% LTV or 4.29% up to 75% LTV and comes with a fee of £1,995.

Jeff Knight, director of marketing at Foundation Home Loans, said: “Since returning to new lending last month, we’ve seen a growing interest from advisers and landlords as they seek to both refinance and add to their portfolios.

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“As the market continues to change, we have taken the decision to enhance our product offering, broaden our criteria and introduce new products which we believe provide a greater degree of flexibility for landlords whose circumstances may well change over the next 12 months.

“Our variable rate products have no ERCs attached and mean that landlords will be able to remortgage with no additional costs in the future.

“Also, our new ‘fixed fee’ product cuts down on the overall and upfront costs for landlords and may be particularly applicable for those landlords seeking larger loans.

“We’re also very pleased to be able to introduce our 125% ICR level for limited company borrowers, plus those who are basic-rate taxpayers.”


Source: Property Wire