Following HBOS’ recent decision to increase the limit on its BTL criteria to £5 million across its entire brand, and edeus’ entry into the market with a proposition that allows for up to 50 properties or £10 million total value on its BTL range, suggestions have been made that other lenders will have to follow suit in a bid to remain competitive.
Nick Gardner, director at Chase de Vere Mortgage Management, said: “The move towards relaxing lending criteria is likely to continue, particularly given HBOS’ decision to increase its lending criteria. More lenders need to increase the limit on their BTL range. As long as the risk is spread throughout the UK and not confined to certain areas, then I think BTL lenders will have to be more generous.”
Alex Murray, group director of mortgages at Thinc Destini, said: “BTL is now 10 years old and many clients have built up significant portfolios, so the need for lenders to allow for more headroom is essential. More lenders will also need to look at lending on a limited company basis as the number of investors grows, as currently only a small number of lenders do this. Increased flexibility is certainly the way forward.”
However, Keith Astill, managing director at UCB Home Loans, said: “Lenders are constantly monitoring the performance of their book in order to understand the market better. However, we do feel that while the market is becoming more competitive, with lenders competing to attract business, we would urge a degree of caution. At a time when interest rates may be beginning to rise, lenders must balance market competitiveness with the responsibility they have to their customers.”
