View more on these topics

Buy-to-letwatch: New kids on the block

We welcome new kids on the block State Bank of India, Foundation Home Loans and Axis Bank, with highlights of their criteria


It has been a busy quarter for the buy-to-let space, with new lenders welcomed into the fray. We are always keen to have a thorough understanding of lending criteria to help us quickly identify where cases should be placed. If you have not had a chance to bring yourself up to speed with State Bank of India, Foundation Home Loans and soon-to-launch Axis Bank, here is a heads-up.

SBI has started with some very attractive pricing. Its terms and arrangement fees are pretty good too. The headline features are:

  • Five-year fixed rates starting from 3.69 per cent
  • Three-year variable rates starting from 2.89 per cent
  • Arrangement fees from nil to £795 to 1 per cent
  • General stress test at 120 per cent of pay rate plus 1 per cent
  • Maximum loan up to £3m
  • Available to SPVs and LLPs
  • Multi-units up to three flats
  • Maximum age of 80 years at end of mortgage term

Less attractive is the maximum LTV of 70 per cent and, if you have cases for HMOs or trading limited companies, you will have to go elsewhere to get them placed.

Customers can access the products directly. SBI has a sales presence in its branches but it is limited to London, Birmingham, Leicester and Manchester.

SBI has also entered the intermediary space. It has a small panel of brokers but its BDMs are also out and about talking to other brokers and some networks. 

We recently joined the limited distribution panel of Foundation Home Loans, which launched its buy-to-let offering to 75 per cent LTV in February, with products for both prime borrowers and those with light adverse credit. The best bits are:

  • Two-year fixed rate at 3.99 per cent
  • Two-year discounted tracker at 3.76 per cent (Libor + 3.19 per cent)
  • No maximum number of mortgaged properties in the background
  • Can have up to 10 properties (max £5m) with FHL
  • Max three properties in any one full postcode
  • Max age 85 at end of the term
  • No credit scoring
  • No minimum income
  • No minimum time self-employed
  • It is ‘good’ with related sales and gifted deposits
  • No minimum size for studios
  • No background affordability checks

To fit prime products, there must be no adverse (missed mortgage payments, defaults or CCJs – unsecured borrowing is ignored) in the past two years. With the light adverse range, borrowers can have one CCJ or default (max £2k) or one missed payment in the past two years (but clean in the past six months). FHL is not suitable for limited company or expat borrowers and is a no-go for flats less than two years old, HMOs, let-to-buy, flats above commercial and flats above six storeys.

Axis Bank will position itself in the specialist space and products will be available via intermediaries only. We expect these great terms:

  • No minimum income
  • Unlimited number of mortgaged properties with other lenders
  • Maximum loan size of £1m
  • Lending to limited companies and expat landlords
  • HMOs will be acceptable security

We dedicate our best buys to the new kids on the block, plus relatively new player and P2P lender Landbay.



FCA ‘competition barriers’ probe

The FCA plans to investigate the mortgage market to see if there are “competition” issues that are failing consumers. In its 2015/16 business plan, published last week, the regulator said it would assess barriers to competition in the market this autumn and will then launch a market study in early 2016. However, the regulator was […]


Norwich & Peterborough launches its lowest-ever 5-year fix

Direct-only Norwich & Peterborough Building Society has launched its lowest-ever five-year fixed rate mortgage at 2.28 per cent. It has a £1,295 fee and is available to borrowers with a 35 per cent deposit. N&P mortgages manager Richard Barker says: “Our priority is to help people to buy the home they want and we are […]


Mortgage prisoners hit as FCA reveals MCD final rules

Mortgage prisoners have received a blow after it emerged lenders will be forced to apply affordability checks on all remortgage customers who come from rivals to comply with the EU’s Mortgage Credit Directive. In a paper documenting the FCA’s final rules on the implementation of the directive, the regulator said it had noticed a “conflict” […]


News and expert analysis straight to your inbox

Sign up

Why register with Mortgage Strategy?

Mortgage Strategy continues to be the market-leading B2B mortgage publication in the UK, and provides trusted, independent insight with the aim of helping, promoting and analysing the latest developments for mortgage professionals.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Mortgage Strategy Events
Be the first to hear about our industry leading conferences, awards, webinars and more.

Research and insight
Take part in and see the results of Mortgage Strategy's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now