Redwood Bank has made changes to help landlords of houses of multiple occupancy rate (HMOs) who struggle with increasing costs and stricter margins.
These include changes in the costs of releasing an extra £ 40,000 extra, an increase of 6% in loan-to-value (LTV) for the refinancing a buy-to-loet (BTL) real estate.
The bank also has the option to have a 5% reimbursement at a lower rate of three years fixed duration to help customers refinance a large HMO with an increase in the LTV by 15.5%.
For commercial deals there is an extra 4.9% LTV available for the customer to acquire new building.
The maximum improvements in LTV as part of the changes are:
• BTL: up to 16% extra LTV
• Semi-commercial: up to 18% extra LTV
• HMO: up to 21% extra LTV
• Commercial: up to 8% extra LTV
Redwood Bank says that the variations control the results in the south, where tighter yields often have limited how many landlords and SMEs can borrow.
The changes arise from the removal of automatic cost deduction in affordable assessments, the reduction of the assessment of the stress speed for bi -nic -years fixed duration loans and the option to use the higher 5% costs for a fixed term of two and three years.
Redwood Bank Head of Business Development (South and London) Mark Dobson says: “This is precisely the type of market intervention that landlords now need. My team in the south has already seen the benefits available for our brokers and borrowers with remarkable increases from LTVs.”
“There is a strong interest in brokers in these affordability improvements. I spoke with countless brokers at the recent NACFB -Exexpo, about the ‘affordability boost’ and how it makes better results possible for their customers throughout the country, but especially the southeast.”