Buy-to-letAug 8 2017

Foundation launches product for experienced landlords

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Foundation launches product for experienced landlords
BySimon Allin

Foundation Home Loans has added a house in multiple occupation (HMO) product for individuals and limited companies that have had previous experience as landlords.

Two year fixes are available from 3.19 per cent and five-year fixes from 3.49 per cent, with no pricing differential for limited companies.

The maximum loan size is £500,000, and the product comes with a 2 per cent arrangement fee.

Rental stress calculations are the same as Foundation’s other buy-to-let products, for example 125 per cent rental cover rate on a five-year fixed rate for a limited company borrower.

The maximum term is 30 years, with a maximum age of 75 at end of term for individuals.

Jeff Knight, marketing director at Foundation Home Loans, said: “We know that landlords with HMOs continue to achieve the highest rental yields - 1.1 per cent above the average according to recent research by BDRC and seem to be growing in popularity. 

“Speaking to some of our intermediary partners, they are delighted to be able to offer more choice to their clients with our new product range to help with their demand.”

A HMO property is a dwelling rented by more than three unrelated tenants using the same amenities.

Foundation’s product covers maximum bedrooms of eight for HMOs, and intermediaries can also access the product for multi-unit blocks up to 10 flats.

Ying Tan, managing director at Surrey-based The Buy to Let Business, said: “The rates are competitive, and fortunately they lend up to eight bedrooms, whereas some lenders stop at six.

“We work closely with these guys, and they have a real desire to be specialists in the buy-to-let arena. This will help them achieve their objective.”