Buy to let lending criteria being relaxed by Yorkshire Building Society

Landlord Expert
By Landlord Expert January 23, 2012 12:54

 

The lender entered the buy-to-let market in August 2011, offering products through its intermediary lending subsidiary, Accord Mortgages – but these products were only available in London and the South East.

 

A spokesman for the building society said that the two regions were a 'pilot area' as it now looks to start lending across England and Wales from Monday, as it enters the buy-to-let market 'step-by-step.'  Other changes to its buy-to-let criteria include dropping the minimum required property value from £150,000 to £100,000 and reducing the minimum income an applicant needs to earn, from £35,000 to £20,000.

 

It will also cut the minimum age of applicants by five years, from 30 to 25, and lift the current 40 mile distance limit between the borrower and the property, as it relaxes restrictions on its buy-to-let deals.  Lenders have been expanding deals in the sector, as the rental market has seen a boom and house prices have generally remained stagnant.

 

 

Rental prices have increased as more potential homebuyers are 'trapped' in rental accommodation, due to a lack of mortgage availability and large, unobtainable deposits.  Statistics from LSL Property Services shows rental prices have increased by almost £50 a month since 2008 as demand grows – and this is appealing to buy-to-let investors.

 

There are nearly three times more buy-to-let mortgage products available than two years ago, according to property website Rightmove, as the market expands due to the 'trapped' renters.

 

However, lenders are expected to generally tighten their criteria this year against the weak economic backdrop and the eurozone crisis.

 

Jeremy Law, head of buy-to-let at Yorkshire Building Society, said: 'We have listened to brokers and taken the opportunity our staged entry has provided to revise our lending criteria.  'However, our lending policy will still reflect the values of the Yorkshire as a prudent mutual and our primary focus is, and always will be, the interests of our members.  'We do not see ourselves as dipping in and out of the market, we are very much here to stay and will be an active lender in the market all year round.'

 

Earlier this week, the Co-operative Bank's broker lender promised to up its mortgage lending in the buy-to-let sector by a third.

 

Platform, the dedicated intermediary lender of the Co-operative Bank, said it would lend at least £600million in buy-to-let loans in 2012, as uncertainty in the wider housing market was fuelling rental demand.

 

Landlord Expert
By Landlord Expert January 23, 2012 12:54

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