Portfolio landlords hit by tough new affordability checks could turn to equity release to ease the burden, according to Retirement Advantage.
The provider has launched a range of equity release products for owners of buy-to-let properties that allow landlords to release cash from their portfolio tax-free while leaving their entire portfolio intact.
It follows the roll-out of more stringent affordability rules by the Prudential Regulation Authority on 30 September, which has piled more pressure on buy-to-let investors with four or more properties hoping to refinance.
Portfolio landlords looking to refinance now face an assessment of outstanding mortgages across their entire portfolio.
The changes have prompted concerns that portfolio landlords, already struggling under the weight of earlier tax and regulatory changes, could struggle to secure the best deals.
In September, a survey for Nationwide revealed one in five landlords could be set to flee the market as a result of the more challenging buy-to-let climate.
Retirement Advantage’s Landlord Lifestyle product has a monthly interest rate of 6.26 per cent and an annual rate of 6.44 per cent, with the interest rolling up and being added to the mortgage each month.
Its Landlord Interest Select option has a monthly rate of 6.07 per cent and an annual rate of 6.24 per cent, and enables borrowers to pay of some, or all, of the interest charged each month.
Finally, the Landlord Voluntary Select option has a monthly rate of 6.45 per cent and an annual rate of 6.64 per cent, and allows capital repayments of up to 10 per cent of the initial loan amount each year.
Alice Watson, head of marketing at Retirement Advantage, said: “As with other property owners, buy-to-let landlords want flexibility when it comes to financing options. Equity release is now a viable route.
“By launching products specifically for buy-to-let landlords this summer, it gives these individuals greater opportunity to use their property wealth to support their retirement.”
Tracey Lucas, equity release adviser at Suffolk-based Needham Mortgage Centre, said: “The latest lifetime mortgage for buy-to-let landlords available from Retirement Advantage represents a very exciting and welcome innovation.
“As with classic lifetime mortgages, the lack of affordability check is very useful.
"I foresee lots of opportunities and although the loan-to-value is of course lower than for a standard mortgage for the client with a sizeable lump sum available to invest in an investment property this is an ideal option.”
simon.allin@ft.com
