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Buy-to-let is becoming more professional as landlords move towards specialist borrowing, claims a mortgage lender.
Foundation Home Loans has released data suggesting one in ten landlords have taken out specialist mortgages for flats over commercial premises, houses in multiple occupation (HMOs) or non-standard properties.
When asked, another one in seven landlords stated they were considering such borrowing in the next 12 months.
Foundation Home Loans sales director Grant Hendry said: "The data shows a market evolving rapidly towards greater sophistication.
"Specialist buy-to-let requirements mean one in seven landlords now plan to use a specialist loan in the coming year, and this trend is strongest among those already operating through limited companies.
"It reflects a sector that is thinking strategically about portfolio diversification, long-term value and the type of products they are going to require going forward."
As interest rates hold steady and are expected to continue falling, a new buy-to-let lender has come to the market.
Available as a broker-only product, Rely caters for all landlords, from first-time borrowers to larger-scale professional investors.
Underwriters will consider adverse credit histories.
Rely was previously known as Kent Reliance for Intermediaries.
Rely's best deal is a 3.74 percent 2-year fixed rate at 80 percent LTV with a 5 percent arrangement fee.
Many buy-to-let lenders have reduced interest rates in recent weeks.
The list includes The Mortgage Works, TSB, HSBC, NatWest, Virgin, Coventry Building Society and West Brom.
Rates have been trimmed by up to 0.30 per cent.
However, data analyst Twenty7tec suggests most new business for lenders comes from landlord remortgages rather than portfolio expansion.
Internet searches for buy-to-let purchases have plunged 13.67 per cent year-on-year, while remortgage searches are up 6.05 per cent.
The firm believes many landlords are holding back on purchases to see if Chancellor Rachel Reeves tinkers with taxes, pensions and national insurance.
Landlords looking for a purchase loan or remortgage should target lenders with products around these average rates:
| Buy-to-let lending | Rate | APRC | Max LTV | |
|---|---|---|---|---|
| 2 year fixed | 2.20% | 8.80% | 75% | |
| 3 year fixed | 4.29% | 6.60% | 90% | |
| 5 year fixed | 3.44% | 6.80% | 65% | |
| 60% LTV | 2.20% | 8.80% | ||
| 75% LTV | 2.20% | 8.80% | ||
| 80% LTV | 2.64% | 6.80% | ||
| Discounted variable | 4.40% | 6.00% | 75% | |
| All variable | 4.40% | 6.00% | 75% | |
| All buy-to-let | 2.20% | 8.80% | 75% | |
| Specialist lending | Lender | Product | Rate | Max LTV |
|---|---|---|---|---|
| First-time landlord | NatWest | 3 Year fixed | 3.40% | 75% |
| Corporate | Molo | 2 Year fixed | 3.56% | 75% |
Source: Moneyfacts