New Licensing rules for HMOs

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With the new rules for licensing HMOs coming into effect on 1st October, maybe it’s time to repeat the post from 6 months ago on this subject.

The definition of a HMO will be changing, bringing an estimated additional 177,000 properties under the HMO rules, meaning they will also need licensing. Under the new rules any property which is occupied by five or more people, comprising individuals from two or more separate households – regardless of the number of storeys in the property – will be classified as a HMO.

If you own and let a property which will fall into this category, and haven’t already done so, you should apply for a licence before 1st October.

The actual legislation can be found Here

The good news is that ibmco can help raise finance and remortgages for shared letting properties whether a licence is needed or not. So please send us your enquiries. And for example we have access to Precise Mortgages exclusive products for HMOs and Multi-Unit properties offering among other things a 5 year fix with only 3 years tie-in. Contact Pav or David for details.

Holiday Let 5 year fixed product

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Leeds Building Society added a five year fix to their range of Holiday Let products. With a maximum of 70% loan to value the rate is fixed at 2.99% until 31 October 2023. Please contact Pav or David for details.

Precise Mortgages Refurbishment Buy to Let Mortgage

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Precise Mortgages have commenced a pilot scheme of their new refurbishment Buy to Let mortgage scheme. Effectively a combination of bridging loan and Buy to Let mortgage the scheme can provide simultaneously an offer for the initial advance and an offer for the long term BTL mortgage based on expected value after refurbishment. Available now via ibmco – please contact David or Pav for details.

85% Buy to Let from Kensington Mortgages

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Kensington Mortgages launches its new range of Buy to Let mortgages today 12 June 2018. These include mortgages of 85% loan to value, Kensington joining a small but growing panel of lenders at this level. Mortgages are available to individuals and companies, with some products having no arrangement fee. Kensington lend on properties in Scotland as well as England and Wales. Contact Pav or David for further details.

Large Portfolio Range of Products from The Mortgage Works

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The Mortgage Works have introduced a new ‘Large Portfolio’ range of Buy to Let Mortgages. These are for customers with more than 10 mortgaged properties. Options include Nil or £995 arrangement fees; free valuations and £250 cashback (purchases and remortgages); free valuations and free legals for remortgages.

Kensington Mortgages introduces BTL for Limited Companies

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Kensington Mortgages announce that from 17th May 2018 they will lend to Limited Company applicants as well as individuals.

 

New BTL 5 year fix from Foundation Homeloans

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Foundation Homeloans announce a new exclusive 5 year fix at 3.34% fixed until 31/07/2023. Available up to 65% loan to value, to professional landlords in individual or company names. Rent stressed at 125% cover at pay rate for limited companies, or 145% for individuals. No minimum income requirement.

New BTL Remortgage Products from Paragon

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Paragon Mortgages announce limited edition BTL remortgage products with free valuation and cashback, for portfolio landlords, i.e. having 4 or more properties.

2 year fixes at 3.4% for single properties or 3.74% for HMOs and Multi Unit blocks come with free valuation, £250 cashback and Nil arrangement fee.

5 year fixes at 3.6% and 3.84% respectively have free valuation, £500 cashback and 0.5% arrangement fee.

All Paragon applications have £150 application fee.

The Mortgage Works reintroduces 80% ltv for Buy to Let

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From today, Thursday 22 March, The Mortgage Works are reintroducing new 2 and 5 year fixed rate products at 80% LTV, with rates starting from 2.99%. (Previous maximum ltv 75%)

The new range of 80% LTV products for Buy to Let and Let to Buy includes: 

·        Purchase, remortgage and further advance

·        A choice of fee options

·        Free standard valuation and £250 cashback options

They’re also increasing the maximum LTV for Houses in Multiple Occupation to 75%, (previously 65%) with rates now starting from 2.84%. 

Shared Accommodation properties

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Shared Accommodation properties

 

Problems raising a Buy to Let mortgage on a property used as shared accommodation, but falling short of needing to be licenced as an HMO can be:

  • Lender will only allow rent to be assessed as a single family let – not as shared accommodation
  • Lender won’t accept separate tenancies
  • Locks on the doors not acceptable

 

All the above can be overcome by applying to the right lender. At ibmco our many years of experience dealing with Buy to Let mortgages have taught us which lenders are best for which properties. Please contact us.

£750 cashback on Buy to Let mortgages

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Hot on the heels of BM Solutions announcement of £500 cashback on some of its Buy to Let mortgages Virgin Money go one better with a limited time offer of £750 cashback on some of their Buy to Let products. Contact ibmco to find out more.

Houses in Multiple Occupation – new rules

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It seems that greater levels of regulation are never too far away, and there will be an extension of HMO licensing from the 1st October 2018. 

In effect, the definition of a HMO will be changing, bringing an estimated additional 177,000 properties under the HMO rules, meaning they will also need licensing. Under the new rules any property which is occupied by five or more people, comprising individuals from two or more separate households – regardless of the number of storeys in the property – will be classified as a HMO from October. 

If you own and let a property which will fall into this category ideally you should be thinking ahead and finding out from your local authority what the requirements will be for a successful licence application.

The good news is that ibmco can help raise finance and remortgages for shared letting properties whether a licence is needed or not. So please send us your enquiries.

Planning ahead with a Forward Funding Facility for Buy to Let

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Planning ahead with a Forward Funding Facility

Let’s suppose you are applying for a Buy to Let mortgage for a new property purchase and you plan to buy more properties in the near future; or, maybe you are applying to remortgage an existing Buy to Let to release capital which you will use as deposits for future purchases.

Why not take the opportunity at the same time to apply for a facility sufficient to cover the expected additional new mortgages?

As a simple example, lets say you are raising a mortgage on an existing unencumbered property to raise £200,000. You plan to use the cash raised to purchase 4 additional properties at around £200,000 each putting in a 25% deposit on each. So your initial mortgage application is for £200k and you anticipate needing 4 further mortgages for £150k each – a total of £600k. It’s possible to request a forward funding facility of £600k on top of the initial £200k application.

So you now have your funding in place which means:

  • A shorter and quicker application process for further properties
  • You are in a strong position to negotiate your purchase because you can demonstrate availability of funding and promise quick completion
  • You can even consider, for example, auction purchases

Of course the property itself must be acceptable to the lender and a valuation survey will be required but as an applicant you are pre-approved. Applicants must be ‘portfolio landlords’ i.e. own more than 3 let properties and can be individuals, partnerships or limited companies.

There is no additional cost in setting up the facility so it really makes sense to do this.

Contact ibmco for further details

 

Increasing and decreasing

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Lloyds Bank announces it is reducing its interest rate by ‘up to 30 basis points’ across its Commercial Mortgage range for Real Estate and Healthcare.

BM Solutions (a member of the Lloyds Banking Group) announces that from tomorrow February 16th 2018 its fixed rate and tracker Buy to Let Purchase products will increase by 0.2%. To be fair, BM’s products had recently looked very attractive in comparison with the market so this adjustment is probably expected.

BM Solutions new Buy to Let Purchase products

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BM Solutions announce two new products for Buy to Let purchases only

1.45% 2 years fixed up to 60% loan to value

1.86% 2 years fixed up to 75% loan to value

Product fee £1,995.

BM also offer remortgage products with free valuation and legals but rates differ from those quoted above.

BM lend throughout the UK, to individuals (not companies)

Subject to BM’s criteria please contact ibmco for further information.