Redwood Bank has made changes to help multi-person living (HMO) homes struggling with rising costs and higher profit margins.
These included changes to the cost to help free up £40,000, and loan-to-value (LTV) increased by 6% to refinancing the purchase of goods (BTL) property.
The bank also has the option of paying a 5% fee for a lower fixed term to help clients refinance large HMOs, with an increase of 15.5% on LTVs available.
For commercial transactions, customers can also offer an additional 4.9% LTV to acquire new homes.
The biggest enhancements to LTV as part of the change are:
•BTL: Up to 16% extra LTV
•Semi-Commercial: Up to 18% of additional LTVs
•HMO: Up to 21% extra LTV
•Commercial: Up to 8% extra LTV
Redwood Bank said the change is driving results across the South, where higher yields often limit how much landlords and small and medium-sized businesses can borrow.
These changes stem from automatic cost deductions in affordability assessments, reducing stress rate assessments for two- and three-year fixed-term loans, and higher 5% fees for using second- and three-year fixed-term usage.
“This is exactly the kind of market intervention landlords need now. My team in the South has seen the benefits of our brokers and borrowers, available LTVs available,” said Mark Dobson, head of business development at Redwood Banking (South and London).
“There is a lot of interest in these affordability improvements. I talked with countless brokers at the recent NACFB Expo about “affordability improvement” and how it can bring better results to clients across the country, especially in the Southeast.”
Earlier this month, Redwood Bank promoted Jane Hand to regional development managers in the Northeast.
