Barclays has extended its buy-to-let range to allow applications from first-time buyers and non-owner occupiers.
The move, which was announced in a note sent out to brokers, means borrowers will no longer need to own a residential property when looking to purchase or remortgage a buy-to-let property with the lender.
Barclays stated the change would provide first-time buyers with an alternative means of getting onto the property ladder.
It stands to benefit young professionals in areas with high house prices, such as London, who are looking to purchase a property to rent out as an investment in a more affordable part of the UK.
Non-owner occupiers who may be looking to re-mortgage an existing investment property have also been given access to the lender’s buy-to-let range.
A Barclays spokesperson said: “Barclays is a responsible lender and we’re always looking at ways to innovate and open up access to home buying.
“First-time buy-to-let will give someone who does not have a mortgage an opportunity to get onto the property ladder.”
The bank has not made any other changes to its existing buy-to-let mortgage application process, and all other existing criteria and affordability requirements will remain the same.
Ray Boulger, senior technical manager at London-based John Charcol, said: “It is certainly a helpful move, because it widens the opportunities for people who want to buy a property but either can’t afford to buy in the place where they want to live or perhaps don’t want to buy a place to live in because they anticipate not staying in one place long enough but want to have a stake in the property market.
“The fact that Barclays are joining the very few lenders that will lend to first-time buyers on buy-to-let, and because they are one of the bigger lenders on buy-to-let, it is certainly helpful because choices in that area are limited.”
But Mr Boulger urged caution when deciding whether to move into buy-to-let as a first-time buyer due to the 3 per cent stamp duty surcharge on additional property purchases, which was introduced by the government.
He said: “We used to find it was quite common for people who worked and lived in London and who wanted a property but could not afford to buy would purchase a property in the north or midlands, now they have to be cautious.
“If they buy a property like that, and then buy a main residence, they will get clobbered with the 3 per cent surcharge on their main residence.
“That takes away a big part of the attraction of being a landlord when you are a first-time buyer.”
simon.allin@ft.com
