From last week, The Mortgage Works, Nationwide’s specialist buy-to-let lender, removed its age limit for loans to experienced landlords. In the past, the lender applied a maximum application age of 70 for all buy-to-let loans – but since 18th April, there has been no maximum age for those landlords who have owned or let for at least 6 months. The move applies to both purchase and remortgages loans with up to 65% loan-to-value available.
Director of Specialist Lending at the Mortgage Works Paul Wootton commented: “The group of experienced landlords is both growing and growing older, and market options are more limited for retirees seeking to retain their buy-to-let properties in order to supplement their pension. By removing the maximum age when applying for a buy-to-let mortgage, TMW is supporting the increasing market demand in this area.”
Landlords have been hit hard with a spate of measures that have cut their profits: from increases in stamp duty and cuts in mortgage interest tax relief to more stringent lending criteria. However, a recent study has demonstrated that plenty of landlords have weathered the storm and still see buy-to-let as a good investment.
Those purchasing properties through a limited company will also benefit from the new criteria, allowing investors to limit the impact of the tax relief changes. This will likely be of interest to professional landlords owning larger property portfolios, where a limited company can often be more cost effective.
Whilst the changes will be welcome by many, they come alongside a wave of increases in buy-to-let mortgage rates. These have been fuelled by a number of factors: the increase in the Bank of England rate in November, the expected increase in May and the decision by the Bank to close two of its schemes, making funding more expensive for lenders. Barclays, NatWest and Kent Reliance have all recently increased their rates; although Virgin Money’s two-year fixed deal still remains low at just 1.39% (40% deposit/£1,995 fees/£750 cashback paid on completion).