The Mortgage Business has extended the criteria on its House 2 House scheme to allow borrowers to fund a second buy-to-let property.
TMB calculates that 60% of borrowers on this scheme have the income available, coupled with the desire to fund the purchase of a second property under House 2 House rules, and predicts a surge in cases by extending the availability of the scheme.
House 2 House is a niche market which attracts high net-worth borrowers with an average income of more than 100,000.
The maximum LTV this product allows is 85% and investors typically are looking for capital appreciation as opposed to a high rental yield.
The House 2 House product from TMB uses a borrowers income rather than rental assessment, and was designed to fit the needs of customers in locations where the increasing supply of properties to let may restrict rental incomes.
Nigel Payne, managing director of TMB, says: The popularity of the House 2 House product lies in the fact that it removes the hassle created by the traditionally narrow way of assessing the property’s self financing capability.
By basing the lending criteria on the borrowers’ income rather than rental income it makes qualification for this product and the application process quicker and easier for intermediaries clients.
By extending the product to a second property, were actually creating a new market and new marketing opportunity for every advisor with clients in this position.
Our calculations suggest that 60% of intermediaries clients could benefit but the actual number may be even higher.
John Mawdsley, managing director at The Mortgage Partnership, has welcomed the move.
He adds: This shows just how clearly TMB understands the buy-to-let market.
There are a host of customers whose income would comfortably allow them to adequately fund the purchase of one or two buy to let properties but traditional methods of calculating a property’s self financing requirements make this impossible.
Advisors are really switching on to the potential of this product and doubling the number of properties able to be funded is a very positive step.