BTL lenders cut rates, widen lending criteria and lift LTV limits

Specialist buy to let lenders have rolled out a fresh round of product changes, cutting pricing, widening criteria and lifting loan to value limits as they compete for landlord business.

Pepper Money has moved first with rate reductions and a significant tweak to its HMO range by cutting pricing by up to 25bps on two-year fixes and by as much as 15bps on five-year fixed products.

Those products target both individual borrowers and limited companies.

Pepper has also expanded HMO eligibility to include properties with EPC ratings of D or E – rather than the previous restriction to homes rated A to C.

New fixed deal rates

The repricing includes new headline rates of 4.44% on two- and five-year fixed deals up to 70% LTV, offered with a 7% completion fee.

The lender said the changes build on its return to the buy to let sector last year, with affordability assessed using interest coverage ratios rather than personal income.

Also, rental income is verified by an independent RICS surveyor.

Pepper’s sales director, Paul Adams, said: “These latest enhancements demonstrate our ongoing commitment to supporting landlords in a challenging market.

“By reducing rates across key buy to let products and broadening our HMO criteria, we’re responding directly to broker feedback and the needs of landlords.”

Darlington boosts maximum LTV

Darlington Building Society has also adjusted its buy to let strategy, increasing the maximum LTV on its limited company range from 75% to 80%.

The move follows the mutual’s entry into the sector last November and reflects growing appetite among landlords using SPV structures.

The society continues to offer a two-year fixed rate at 5.29% and a five-year fixed at 5.39%, each carrying a £999 product fee plus valuation costs.

The deals are available for purchases and remortgages, including holiday lets, and are open to first-time buyers and first-time landlords with no minimum income or ownership period.

Darlington’s head of intermediary distribution, Chris Blewitt, said: “As a lender that understands individual cases and the profile behind them, we felt the market needed our support now more than ever.

“Raising LTV to 80% gives brokers an extra tool when helping clients structure their borrowing in a way that suits long term plans.”

CHL unveils a limited edition

Meanwhile, CHL Mortgages has launched a limited edition range of two-year tracker products at 75% LTV, aimed at landlords seeking flexibility.

The trackers are available across single dwelling and HMO properties, with no early repayment charges and a choice of 2% or 5% fee options.

Pricing for single unit homes starts at 5.50% with a 2% fee or 4.10% with a 5% fee.

HMO trackers are set at 5.60% with a 2% fee and 4.20% with a 5% fee.

The lender’s group sales director, Darrell Walker, said: “Following on from the introduction of a new range of 75% and 80% LTV products, the launch of these trackers reinforces our commitment to providing a competitive, well-rounded suite of specialist mortgage solutions which are designed to support brokers and landlords in an ever-changing market.”

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