Barclays is relaunching its 75% LTV buy-to-let deals through brokers tomorrow and introducing a new 10-year fixed rate on its residential range.

Last week the lender launched its B2L 75% deals through its direct channel, but from tomorrow it will re-introduce its products via brokers as well.

It is offering a two-year fixed rate up to 75% LTV at 5.29% and a two-year tracker up to 75% LTV at base +3.99%.

It says it has listened to feedback around the fees and the products available through its direct and broker channel and will now provide a tiered fee approach:

For deals between £50,000 and £125,000 the fee will be £1,999
Between £125,000 and £250,000 the fee will be £2,999
Over £250,000 the existing £3,999 fee will remain
At the same time it is introducing a 10-year fixed rate at 70% LTV with a rate of 4.99% and cutting its three-year fixed rate at 90% LTV to 5.99%.

Andy Gray, head of mortgages for Barclays says: “Today’s mortgage changes are about boosting the availability of buy-to-let and providing competitive longer term deals in the residential mortgage market with the launch of a 10 year deal to support borrowers who are worried about the long term base rate outlook.”

The lender is also adjusting some of its other price points to manage demand across its product mixes. It says this is set against a backdrop of a series of economic indices surrounding the continued global and Eurozone uncertainty which have influenced funding across the market.

The two-year fixed rate at 70% LTV which includes its Great Escape mortgage is increasing by 0.25% from 3.49% to 3.74% and all its tracker and offset mortgages will increase by up to 0.21%.

3mc is offering a bridge and remortgage deal from Aldermore Commercial Mortgages and Precise Mortgages.
Rob Lankey, managing director of Aldermore Commercial Mortgages, says: “The team at 3mc has identified a growing market opportunity and has responded with an attractive package that combines both bridging and an exit route using an Aldermore buy-to-let mortgage.

“We look forward to working with 3mc to ensure this package is a great success.”

Doug Hall, director of 3mc, adds: “As the vanilla buy-to-let market continues to grow and develop so does the specialist buy-to-let market.”

The product is designed for buy-to-let investors and combines a standard bridge from Precise with a remortgage exit from Aldermore.

It will be processed by 3mc using the same valuer for both lenders.

Hinckley & Rugby Building Society has cut the rates on three of its lifetime discount mortgages.
The 75% and 80% LTV deals have an arrangement fee of £195, while the 85% LTV deal has an arrangement fee of £395. All products also come with a £695 completion fee.

Chris White, chief executive of Hinckley & Rugby, says: “Thanks to these rate cuts our discount mortgages are even more appealing. We expect them to be very popular.

“Given they are lifetime discounts, these are very competitive mortgages.”

The society has reduced its lifetime discount deal at 75% LTV from 3.39% to 3.29%, a discount of 2.35% from its SVR.

At 80% LTV the product now has a rate of 3.39%, down from 3.49%, while at 85% LTV it has a rate if 3.79%, down from 3.89%.

Concerns are mounting over the growing likelihood of EU regulation of buy-to-let mortgages in the UK, with some landlords being urged to remortgage long-term sooner rather than later to avoid possible difficulties later.

There are fears that regulation could restrict mortgage availability and force landlords who are unable to remortgage to sell up, with falling house prices and fewer properties to rent among the results.

According to new analysis by the Building Societies Association, EU intervention could prove disastrous.

Some 1.4m landlords with buy-to-let loans are set to be affected by the proposed changes, and some might find they no longer qualify for a remortgage in as little as two years’ time.

The new EU legislation, being brought in to deter ‘irresponsible lending’, is due to be voted on early in the new year and to come into effect in 2013.

At its heart, the EU draft Directive on Credit Agreements Relating to Residential Property says says buy-to-let mortgages should be regulated in the same way as residential mortgages.

This would prevent lenders from taking anticipated rental income into account when deciding the amount of the loan.

The EU proposals, which would bring Britain into line with Continental practice, would force lender to assess buy-to-let borrowers in the same way as mortgage applications by owner occupiers – ie, on earnings and the size of their deposit.

Currently, rental income is treated as unearned income, so would not count in calculations. 

Paul Broadhead, head of mortgage policy at BSA, said: “If rental income is excluded from consideration when underwriting BTL, then the availability of new borrowing could cease fairly rapidly. In addition, those with existing buy-to-let loans may well be unable to refinance.

“Over time this could lead to a reduction in private rented sector properties. At the extreme, current BTL borrowers may be forced to sell their property portfolios, which would have obvious implications for existing tenants and the housing market as a whole.”

Landlord bodies, such as the Residential Landlords Association, have consistently criticised EU attempts to regulate the buy-to-let mortgage sector, saying that it is inappropriate, given that landlords are essentially business people, making business decisions.

Regulation of buy-to-let loans would bring the sector under the remit of the FSA and its successor, thus giving buy-to-let borrowers consumer-style protection in the event, for example, of mis-selling.

The FSA appears to be ready to welcome this.

At the recent CML conference, Sheila Nicoll, director of conduct policy at the FSA, told delegates that it is for the Government to decide whether buy-to-let should be regulated. But she added: “We certainly see benefit in having the buy-to-let market regulated alongside the residential mortgage market.”

Average house prices in the UK increased by 0.1% in September to reach £166,256, Nationwide’s latest house price index shows.

September’s average price represents a 0.3% fall when compared to September 2010, and the three-month on three-month measure of house prices was unchanged in September.

Robert Gardner, chief economist at Nationwide, says: “UK house prices continued to tread water in September, rising by 0.1% during the month. Prices were also essentially flat over the year, just 0.3% lower than September 2010.

Aldermore Bank is the first mortgage lender since the credit crunch to offer 100% loans. The return of 100% mortgages will not be welcomed by all as the regulator is paranoid about ‘irresponsible’ lending and has generally frowned on 100% loans since the clamp down on lending which has deterred the banks from returning to this market.

Aldermore Bank is offering 100% loans to value – provided the borrower can persuade a parent, grandparent or other relative to guarantee the loan. But there are tough conditions that not all guarantors will like. Aldermore will take a 10-year charge, for 25% of the amount borrowed by the first-time buyer, on the guarantor’s property.

Northern Rock has reduced rates across its mortgage range by almost 1% and extended its £500 cashback incentive to include all buy-to-let products with percentage fees.

Northern Rock’s two-year Everyday fixed rate products with a £995 product fee now start from 2.67% for both purchase and remortgages up to 70% LTV, a reduction of 0.32%.

Its two-year Everyday fixed rates with no product fees, start from  3.19% at 70% LTV.

Northern Rock has also reduced selected mortgage rates across its products at 80% LTV, 85% LTV and 90% LTV.

A 90% LTV two-year Everyday fixed rate mortgage  for purchase customers, is now available from 5.25% with a £995 product fee.

Customers will also qualify for £500 cashback. Or for those who choose its Fee Saver Option, the same term is available at 5.45%.

It says following demand from BTL customers the lender has also extended its £500 cashback incentive on selected residential products, to include all BTL products with a percentage fee.

Selected fixed rates in the Intermediary Exclusive range of mortgage products have also been reduced by up to 0.30%.

Barclays will cut mortgage interest rates tomorrow with over 40% of its Woolwich mortgage products being reduced by up to 0.55%. 

 The rate cuts include a 3-year fixed rate at 80% loan to value, cut from 4.68% to 4.13%.

A reductioncof 0.20% will be made to their 2-year fixed at 80% LTV, and a cut will also be made to the 5-year fixed rate mortgages at 80% and 85% LTV by up to 0.50%.

Other cuts include a 0.20% decrease on their 2-year fixed rate at 75% LTV, now 2.99%.

On tracker mortgages Barclays is making a cut for borrowers at 75% LTV over two years, with a new rate of 1.97% above base rate

The number of mortgages agreed in June rose as providers did more lending with 10 to 15% deposits.

Lenders are also struggling to meet 6 month  lending targets after a slow start to the year.

Low-income buyers applying for the higher loan-to-value (LTV) products continue to struggle with tight criteria.

Fewer first time buyers got onto the property ladder in June as approvals for homes under £125,000 – typical first time buyer property – accounted for only 22% of total approvals in June, down from 23% in May, and the lowest level since November 2010. This contrasts to early 2008 when purchases of the cheapest property accounted for 30% of all approvals, largely by wealthier buyers.

Richard Sexton, business development director of e.surv said: “There has been a great deal of recent chatter about 95% LTV products hitting the market, but if you delve beyond the headline loan-to-value ratio it is clear criteria remain too restrictive for the majority of lower income buyers.”

The South saw a greater increase in purchase approvals than the North, with house purchase approvals in London up 12.3% in June, and 6.9% in the South-East. In contrast, in Scotland purchase approvals fell 1.4%, while activity was also relatively subdued in Cumbria and the North-East, with increases of just 2.8%.

Overall first time buyer numbers in London remain relatively low, reflected by the average LTV, which is well below the national average at 56.1% and lower than any region in England and Wales, reflecting the larger pool of wealthier buyers. At the height of the boom in May 2007, LTV s in London were 68.5% and higher than the national average.

“Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter,” said Sexton.

The Bank of England’s Monetary Policy Committee has voted to keep the base rate on hold at 0.5%.
They  also opted to maintain the size of the Asset Purchase Programme at £200bn.
Interest rates have been on hold at 0.5% since March 2009.

Six members of the MPC voted to keep the base rate at its historic low of 0.5% in May, while Andrew Sentance opted to increase it by 0.5% and Spencer Dale and Martin Weale voted for a 0.25% hike, as they did in April.
Regarding the stock of asset purchases, eight members of the MPC voted in favour of keeping it on hold in May, while Adam Posen voted to increase it by £50bn as he did the previous month.
Ben Thompson, managing director of Legal & General Mortgage Club, says: “The gap between bank rate and inflation may be widening but there are precious few other indicators that provide a rationale for increasing BBR from its current rock bottom levels.
“The Bank remains in the thick of it; on the one hand needing to ensure that a sustainable economic recovery is baked in, on the other hand ensuring it does not lose its credibility as an independent rate setter that is capable of maintaining a controlled and low inflation economy. It’s a tough one that, but the recovery has to come first.”