Landlords facing rising costs and squeezed margins are set to benefit from new affordability changes at Redwood Bank, designed to help unlock higher-value loans.
The move comes at a crucial time for property investors, particularly in the South of England where tight yields have limited borrowing potential.
Mark Dobson, head of business development (South and London) at Redwood Bank, said: “This is exactly the kind of market intervention that landlords need right now.
“My team in the South have already seen the benefits for our brokers and borrowers with notable increases in LTVs available.”
Redwood has already reviewed broker cases that highlight the impact of the changes, including an additional £40,000 – equivalent to a 6% LTV increase – for refinancing a buy-to-let property, a 15.5% LTV uplift on a large HMO refinance using a 5% fee on a lower rate 3-year fixed term, and a 4.9% LTV rise for a commercial acquisition.
“It’s a game-changer for landlords wanting to progress deals and fund their next move,” Dobson said.
The maximum increases now possible are up to 16% extra LTV for buy-to-let, 18% for semi-commercial, 21% for HMO and 8% for commercial.
The improvements are driven by the removal of automatic cost deductions in affordability assessments, a reduced stress rate for 2- and 3-year fixed term loans, and the option to use a higher 5% fee for these products.
Dobson added: “There’s strong broker interest in these affordability improvements. I spoke to countless brokers at the recent NACFB Expo about the ‘affordability boost’ and how it’s enabling better outcomes for their clients across the country, but especially the South East.”
