Opus Mortgages is to relaunch its commercial mortgage income protection plan Bond 2 Let.
Backed by igroup, the product ensures that buy-to-let landlords have a guaranteed income stream whether tenants default on their rent or damage or suddenly vacate the property – events that would otherwise leave the landlord with no income with which to pay off their mortgage.
Lockhart Bruce, director of Opus Mortgages, says: “While lenders make checks on the landlord when they want to buy a property, similar checks are not made on tenants. Bond 2 Let is a safety net for landlords such that should the tenant damage the property, default on payments or simply vanish, there is money to call upon.
“The aim is to give people a sense of security. For a lot of people buy-to-let is an investment made so that they can maximise their income.”
Bond 2 Let had previously been backed by Mortgages PLC but the lender withdrew its funding in February. MPLC told Mortgage Strategy it withdrew funding for “strategic reasons”.
Opus has since arranged funding from igroup following the canvassing of a number of lenders.
Keith Heron, chief executive of the National Association of Commercial Finance Brokers, says: “Anything that gives security to the landlord has got to be a good thing because it also helps encourage lending.”
On the packaging side of the Glasgow-based operation, Opus has introduced a set standard fee of 0.25% of the broker's procuration fee on all transactions.
Mel Fordham, managing director of Essex-based packager Olympus, says: “I can't see how you could possibly run a business on just 0.25%, especially with all the regulatory changes that we're facing. The margin would be too tight for us.”