Improved Funding for landlords - 07.09.09

Author: David Whittaker Posted on: 07 September 2009

The re-launch of Base Commercial as Aldermore Bank in mid July was greeted by many lenders with raised eyebrows and helpful comments about when was the right time to enter property lending. Equally to some now is precisely the right opportunity to set out your criteria and appetite for new loans as competition in certain sectors is weak thereby allowing for better returns on moderate LTVs. Certainly landlords with Buy to Let and residential investment properties have felt the benefits.

The Aldermore Bank offering is simply presented as lending to 70% of value or purchase price on mortgage terms up to 25 years with interest only periods if only borrowing 50% or 60%. With a payrate of 5% and a completion fee of 1.75% this is market competitive and compares very favourably with some Buy to Let mortgages where completion fees of up 3.5% seem to be increasing...

The real benefit comes from their willingness to lend on HMOs, semi commercial properties and to Ltd Cos holding property. They will look at recent conversions or refurbishmenst purely on the merits of the new transaction without looking for the property to be held for a fixed period. They will also support young commercial owner occupier businesses at a time when the High Street Banks are increasingly nervous over too much exposure on property based lending.

Their Rent to Interest calculation is fairly robust but is more user friendly than the high street and on HMOs means that lending to 70% is a realistic option.

Finally, and of equal importance is their "short credit chain" with underwiters empowered to agree transactions with a credit team available at a moment's notice to give support to larger applications.

Author: David Whittaker