The UK’s buy to let (BTL) mortgage market is witnessing significant changes, with several lenders slashing their rates and relaxing lending criteria, offering landlords and investors new opportunities in the property market. Here’s a detailed look at what’s happening.

Lower Rates and Relaxed Rules

Paragon Bank is reducing its five-year fixed-rate buy to let mortgages by up to 0.70%. This means landlords can now secure mortgages at significantly lower rates. For example, a five-year fix is now available at 4.50% for single self-contained properties, or at 4.45% for properties with an Energy Performance Certificate (EPC) rating between A and C.

More Benefits for HMOs and MUBs

Houses in Multiple Occupation (HMOs) and Multi-Unit Blocks (MUBs) haven’t been left out. These can now be mortgaged at a rate of 4.70%. Louisa Sedgwick, Paragon’s commercial director, highlighted these reductions as a positive start to the year, especially for landlords seeking high loan-to-value (LTV) options.

Making Mortgages More Accessible

Paragon is also easing its lending criteria. The maximum loan term has been extended from 25 to 35 years, increasing flexibility and affordability for landlords. Additionally, the minimum experience requirement for HMO and MUB applications has been reduced from three years to two, making it easier for new landlords to enter the market.

Interest Coverage Ratios Adjusted

Another key change is the reduction of the reference rate from 5.50% to 5.00%, affecting how interest coverage ratios (ICRs) are calculated. This adjustment will likely make mortgages more affordable for many landlords.

Other Lenders Joining the Trend

Landbay’s Rate Reductions

Landbay has also reduced rates on its five-year fixed-rate products, with some rates dropping by up to 0.46%. These products now start at 4.39% and are available for various LTVs, from 55% to 75%.

Accord Mortgages Introduces Competitive Rates

Accord Mortgages is not far behind, launching a new range of buy to let products with reduced rates. These include cuts of up to 0.95% on selected five-year fixed-rate products. The new range caters to both purchase and remortgage needs, with diverse fee and cashback options.

Penrith Building Society’s Fee Waiver

Penrith Building Society is waiving mortgage application fees for a limited period. This applies to both new and existing residential and buy to let customers, offering a cost-effective option for those looking to take advantage of the current market conditions.