Niche buy-to-let finance

Andy Young at Property Hawk Mortgages says:

As the buy-to-let mortgage market has continued to recover, lenders are becoming more flexible in their approach to product design and criteria. As a result there are now some great options for landlord clients who have less mainstream buy-to-let finance requirements.

HMOs and student lets

HMOs and students lets can be financially rewarding for buy-to-let investors because of the potential to receive rental income from multiple tenants in a single property. Property Hawk Mortgages currently places HMO cases with five lenders – Leeds Building Society, Kent Reliance, Paragon Mortgages, Shawbrook Bank and TMW.

TMW has a number of products specifically for HMOs, which are available up to 65% LTV, and will consider up to four tenants on a single AST.


For larger HMOs, Paragon will consider up to twenty tenants on multiple or single ASTs and for landlords looking for higher gearing in their multi-unit investments, Kent Reliance is still proving popular with its 85% LTV products, which are available for properties with up to eight tenants.

Shawbrook Bank has a flexible approach to lending and doesn’t stipulate a maximum number of tenants, instead assessing applications on a case by case basis.

Refurbishment products

Carrying out improvements to a buy-to-let property is a great way for landlords to increase its value and generate higher rental income. Fortunately, there have been some improvements in this niche area of lending and a number of buy-to-let products are available to help landlords with their refurbishment projects.

For properties that require minor works such as a new kitchen, bathroom, windows, doors or plastering, there are some lenders who offer ‘light refurbishment’ products. These include Saffron Building Society, Shawbrook Bank, Paragon Mortgages and Kent Reliance.

Shawbrook Bank has also recently launched a product for ‘heavy refurbishments’ which are defined by the works being completed costing more than 15% of the property value. This would include projects such as an extension, loft conversion, internal configurations or change of use such as converting single dwellings into flats.

Expats

Although it only represents a small portion of buy-to-let mortgage business, British expats will be pleased to know that there are more options available, with both Kent Reliance and Saffron Building Society offering specific Expat products alongside their core ranges. Other lenders such as National Counties and Shawbrook Bank will consider expatriates as part of their standard buy-to-let criteria.

It is encouraging to see lenders extending their product ranges and being open-minded to the non-vanilla requirements of landlords, providing more options when looking for a buy-to-let finance solution.

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