The Mortgage Works (TMW), the specialist buy to let (BTL) arm of Nationwide Building Society, has reduced its rates on tracker mortgage products.
Rates have been reduced on selected two-year tracker products by up to 0.30 of a percentage point and five-year fixed mortgage rates by up to 0.15 of a percentage point.
A new five-year fixed rate house in multiple occupation (HMO) product range is also being introduced, starting at 3.69 per cent, while the existing two-year fixed rate product with £1,995 fee is being reduced by 0.15 of a percentage point to 2.99 per cent.
The two-year BTL tracker mortgage products up to 65 per cent LTV with a £1,995 fee will be reduced by 0.30 of a percentage point and start at 1.39 per cent, while the two-year tracker with a 2 per cent fee will be reduced by between 0.20 to 1.39 percentage points.
Rates for the five-year fixed rate mortgage product up to 65 per cent LTV with no fee will be reduced by 0.10 of a percentage point to 2.89 per cent, while the product up to 75 per cent LTV with £1,995 fee will be reduced by 0.15 of a percentage point to 2.89 per cent.
The BTL market is undergoing a period of change and guidelines issued by the Prudential Regulation Authority last year mean lenders need to introduce bespoke underwriting standards for portfolio landlords – defined as those with four or more properties – by 30 September 2017.
According to some brokers this has left landlords in limbo as they await the outcome of the changes.
The new standards are designed to reflect the differences between simple and complex BTL, the latter of which involve cash flows and costs arising from multiple tenancies.
BTL borrowing is also expected to grow more slowly than previously forecast as regulatory pressures continue to dampen activity in the sector.
The Council of Mortgage Lenders has revised downwards its December prediction of £38bn-worth of BTL lending in both 2017 and 2018 to £35bn this year and £33bn the following year.
The changes were made to reflect tax and prudential burdens in the housing and mortgage markets.
Provider view:
Paul Wootton, managing director of TMW, said: “Our tracker products will continue to offer a switch to fix feature, meaning that landlords can switch to a fixed rate product at any time during the initial two-year deal period. Extending the range for HMO landlords will also allow us to offer a wider choice of products and continue to support landlords in their choices.”
Adviser view:
Daniel Bailey, principal at Middleton Finance, said: “Landlords have been hit hard with the new tax laws being phased in and extra stamp duty costs to take into account. BTL lenders are trying to entice people back into the market with very low rates. The tracker products which offer a switch to a fixed rate may be of interest to some landlords."
Charges:
Two-year fixed rate product and two-year BTL tracker mortgages have a £1,995 fee.
Verdict:
The lending market in general is very competitive as lenders battle to draw people back into the market with low rates. These products are a reminder of how important it is to take into account the arrangement fee lenders charge when choosing a deal.
