The buy-to-let market in London is showing signs of recovery, says West Bromwich. But despite this, it is refusing to lend on properties within the M25 with the relaunch of its buy-to-let product.
Richard Early, assistant manager of credit and risk at West Brom, says: “West Brom's perception of the London housing market is that it is overheating. Supply and demand have been out of kilter for some time. But there are signs that the market is equalising.”
The revamped buy-to-let product comes with a 5.54% initial pay rate, a 0.76% discount off its SVR of 6.30% for three years, a maximum LTV of 80%, refunded valuation and £300 cashback for purchase.
The product also allows investors' income to be included in the rental calculation. This means that a larger sum of money can be borrowed.
The London market ban represents a climbdown from West Brom's previous buy-to-let which excluded properties throughout the South-East. But with the rental market depressed and interest rates rising, brokers say the product would have been well-suited to the London market.
Simon Bucknell, business development manager at Chelsea Mortgage Management, says: “West Brom has been quite innovative with its latest buy-to-let product, with all bases covered. But it's a shame it excludes London as the facility to use your income to make up for any loss in rental cover would have been welcome.”
But Jonathan Cornell, technical director at Hamptons International Mortgages, says: “All credit to West Brom. Its decision to exclude London is in black and white and is clear for all to see.”