Stigma of lending on New Builds is easing

Stigma of lending on New Builds is easing

11:31 AM, 26th November 2014, About 9 years ago 1

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BM Solutions have changed policy and criteria for New Builds. The maximum Loan to Value now available on New Build houses and more importantly New Build Flats has increased from 65% to 75% LTV.

75% is the standard maximum LTV for BM Solutions and all products will now be made available to New Build houses and flats without penalty.

Since the Credit Crunch many Buy to Let lenders decided not to lend on New Build flats at all as they were left for a period with reduced or negative equity. This was partly a product of No Money Down schemes and legitimate same day remortgages often on New Build properties, but Flats took the worst hit in terms of reduced value.

It is great to see the market stabalise enough for one of the biggest BTL lenders recover its confidence in New Build properties and especially flats.

Phil Rickards, of BM Solutions said, “increasing the LTV to 75% across all new-build products demonstrates our commitment to supporting the New Build sector and provides landlords with greater support in providing rental accommodation.

Having the same maximum LTV for flats and houses and allowing those looking at new build to access our full product range gives brokers confidence in our message that we are fully behind the New Build sector.”new build

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Howard Reuben Cert CII (MP) CeRER

12:43 PM, 27th November 2014, About 9 years ago

Yes, great news from BM.

Recently, my Firm has been instructed to provide mortgage advice to a London developer who - in 2015 - will be selling off approx 500 flats. In preparation, I have tasked a team of my Advisers to collate the 'new build' and off-plan criteria from all of the lenders that we deal with and I was really surprised at how much more flexibility is now back in the marketplace.

Quite apart from LTV's, each lender has it's own site exposure caps, as well as the usual borrower lending limits too, and all lenders are different of course, but our collated 'bible' of new build products and services, including the updated BM Solutions LTV criteria too .... and it is a happy read!

The news reports and forecasts for BTL in 2015 are so positive. With new build criteria far more relaxed now, this niche could also be a huge investor market for 2015 too.

The market has settled now, the new build properties are not being (over) valued like they were pre-credit crunch, so are investors going to be considering this asset class more in the next year?

I'd actually be quite interested in Property118's member / BTL investor's feedback on this.

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