Buy to let mortgage borrowing has survived the latest attempt at regulation by the European Union.
The latest mortgage directive – as the Credit Agreements Related to Residential Property Directive (CARRP) – has been passed by the European parliament and becomes a common framework for countries across the continent to manage the mortgage market.
However, the British buy to let mortgage market is exempt after intensive lobbying by several landlord organisations and politicians.
The directive aims to create a single mortgage market across Europe, which allows banks to lend across borders. Consumers can also expect common documents, mortgage features and rules.
One outcome is lenders have to proof that borrowers can afford their loans.
Buy to let mortgages remain commercial loans.
Buy to let lending increases
Landlords borrowing increased by 12% in July compared with June, says trade body the Council of Mortgage Lenders.
Banks and building societies advanced 15,200 loan in July worth £2 billion.
Lender raises LTV bar
Shawbrook has raised loan-to-values on buy to let borrowing to 70%.
The bank has also relaxed underwriting to give a minimum property value of £110,000 – so at the new LTV level; the minimum loan becomes £77,000 for landlord borrowers.
The lender has also raised the number of properties allowed in a portfolio to six.
Spokesman Maeve Ward said: “We are thrilled to change to our buy-to-let product in terms of increasing LTVs and added flexibility in terms of our processing procedures.”
Cop a deal with Keystone
Keystone Buy to Let Mortgages has started lending in Edinburgh, Glasgow, Dundee and Aberdeen.
Keystone managing director David Whittaker said: “There is an opportunity to help landlords north of the border where demand for rental properties remains strong, especially in the main cities and that’s where we will be focusing our efforts.”