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Landbay and Kent Reliance make changes to buy to let offering

Landbay launches new buy to let range for HMO properties whilst Kent reliance updates its interest coverage ratio.


Landbay, the specialist buy to let lender, is launching a new range of buy to let products with a specific focus on enhancing its HMO offering, making it easier for brokers and landlords alike to access finance for such properties.

The new product criteria open a window of opportunity for brokers looking to place HMO cases. HMOs can deliver high returns, and are popular with many buy to let investors, but are usually considered to be complex cases. Landbay’s product changes will mean small HMOs will be treated as standard properties, while the minimum property value will be reduced to £120k. 

Highlights of the range include:

  • two-year fixed rates from 3.09% @ 75% LTV (now including small HMOs of six bedrooms or less)
  • five-year fixed rates from 3.59% @ 65% LTV
  • Trackers from 3.10% + LIBOR (3.62% current rate)
  • 2 year fixed for large HMOs (7 bedrooms or more) from 3.59%
  • No ERC Trackers from 3.10% + LIBOR (3.62% current rate)

Paul Brett – Managing Director of Intermediaries at Landbay commented:

“HMOs can offer extremely attractive rental yields, but letting out one property to multiple tenants does come with complexities. That doesn’t however mean the lending criteria needs to, especially when managed by a specialist lender.

“Landlords have had a job on their hands coming to terms with recent tax and regulatory reform, and many experienced investors have been reviewing their portfolios, increasingly looking to HMOs to boost rental income and protect profits. I hope these changes will be well received by any broker with a HMO case to place.”

Also in the BTL sector, from today Kent Reliance is simplifying the interest coverage ratio (ICR) applicable to both standard and specialist property types, with some figures also being reduced.

ICR calculations will no longer depend on the number of properties owned. Instead, ICR will depend on whether the application is being made in a personal or limited company name, and whether the property is standard or specialist.

Standard property includes single dwellings, HMO/student lets with up to five rooms, and freehold blocks or titles of land with up to four dwellings.

The ICR applicable to standard property is 125% for a limited company and 140% for personal applicants.

The specialist category includes HMO/multi/student lets with six or more rooms, and freehold blocks or titles of land with five or more residential units. The ICR applicable in these cases is 145% and 160% respectively.

Affordability stress rates remain unchanged.


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