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Relaxed calculations are a welcome relief

Brokers have applauded The Mortgage Works&#39 decision to relax lending calculations on its buy-to-let product.

The intermediary lender of the Portman has reduced the measure by which it determines rental calculations from Bank base rate plus 1.95% to Bank base rate plus 1.45%.

This is the figure by which lenders &#39stress-test&#39 a loan, setting the amount of rent a property will draw in against the amount needed to service the mortgage.

With interest rates rising and rental prices falling borrowers have greater leeway, effectively being able to borrow more. This is particularly welcome in London and the South-East, where affordability has been stretched in the wake of recent base rate rises.

Matthew Wyles, Portman group development director, says: “It is a case of being consistent. This means that we will be able to lend taking a long-term view of interest rates rather than making tactical responses to base rate rises.”

Platform Home Loans has also revised the way it calculates rental income by using the initial pay rate rather than the reversionary rate on products lasting five years or more. With Platform&#39s core five-year tracker loan at Bank base rate plus 0.90%, £115 less rental income is now needed per month to service a £100,000 loan – or alternatively an extra £20,000 could be borrowed for the same rent.

Guy Batchelor, sales and marketing director at Platform, says: “The changes have been introduced in response to feedback from intermediaries who deal with buy-to-let borrowers particularly in areas where the ratio between rental income and amounts borrowed has narrowed. They will now be able to offer Platform&#39s products to a wider group of clients.”

Jonathan Cornell, technical director at Hamptons International Mortgages, says: “Interest rates rising and rents under pressure was a double whammy on buy-to-let so it is refreshing to see companies doing this.”


GMAC launches online marketing toolbox

GMAC-RFC has launched an online marketing toolbox to provide marketing support for mortgage intermediaries. The marketing toolbox has been created in response to research conducted by GMAC-RFC, which revealed that intermediaries required tips and guidance on PR and marketing activities. Over 200 mortgage intermediaries and IFAs were interviewed and their feedback revealed that well designed […]

Moneyfacts launches e-commerce portal

Moneyfacts has expanded its operations with the launch of an e-commerce portal for financial advisers, eMoneyfacts. For the cost of a current year&#39s subscription to Moneyfacts magazine, eMoneyfacts combines the best features of printed publications and online services to deliver assistance to those advising on mortgages, savings, protection, credit cards and loans. Features includes ePages, […]

Service targets DA brokers

Mortgage, general insurance and protection service provider Mortgage Support Network has joined forces with compliance services firm SimplyBiz to create Mortgage Support Direct, targeting brokers opting for direct authorisation. SimplyBiz, set up in 2000 by DBS founder Ken Davy and the UK&#39s third largest compliance services provider, and MSN already have 1,000 member firms and […]

SPML extends fixed rates by six months

Southern Pacific Mortgage Limited has extended its fixed rates on standard, large loan, let-to-buy and Right to Buy schemes by six months to September 1 2005. Fixed rates on these schemes start from 5.99%. The current discount offer on SPML&#39s Right to Buy scheme D has also been increased by 1% to 1.75%, while the […]


Neptune video: Abenomics: the impetus for Japan’s fast-track recovery?

The remarkable performance of the TOPIX over the past year has caused many sceptical equity investors to look again at the Japanese market. These returns have come despite very significant problems facing the Japanese economy. Chris Taylor, manager of the Neptune Japan Opportunities Fund, discusses these problems and whether Abenomics will be able to overcome them, enabling the market to continue to rise.

In the video, Taylor addresses the following:

• The size and speed of Japan’s unprecedented monetary policy
• Abenomics and the implications should it fail
• Corporate Japan and beneficiaries of government policy


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