Other Posts by Michael Aglony

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• Data indicates property market progress!
• At last - Funding for HMOs, Freehold Conversions & Limited Companies returns! 23.07.2009
• Increase in fixed rates as "perceived" inflationary pressures start to build. 22.06.2009
• Survey's report increases in house prices - 15.05.2009
• Base Rate stays at 0.5% for a second month - 07.05.2009
• Base Rate remains unchanged at 0.5% - 09.04.2009
• As the market bottoms out, now is the time to secure that property bargain - 03.04.2009
• The Turner Review may impact Buy to Let warns Lord Turner
• Now that Base rate has dropped to 0.5% it's time to fix!
• Northern Rock resumes lending - what will be its impact?
• Will everyone benefit from the 0.5% Base Rate cut?
• Bank Base Rate now seems set for 0.5% cut on Thursday
• B&B appoint Mortgages for Business for early repayment charge clients
• It looks like Bank of England Base Rate could drop to 1% next week
• Will Base Rate stay below 5% in 2009?
• It's all about cashflow!
• Mortgage Express are waiving all Early Repayment Charges!
• SWAP rates and LIBOR rates on the move in 2009 - 13.01.2009
• Bank of England Base Rate cut by 0.5%. How will this effect Buy to Let? - 08.01.2009
• Market awaits Year End movements at Banks
• Merry Christmas and here's to a better 2009!
• 3 month LIBOR continues to ease slowly - 16.12.2008
• LIBOR, SWAP rates, base rate and interest rates - we're seeing history being made - 11.12.2008
• Base Rate reduced to 2%
• The return of Buy to Let as a commercial transaction

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Improved Funding for landlords

By Michael Aglony

The re-launch of Base Commercial as Aldermore Bank in mid July was greeted by many lenders with raised eyebrows and helpful comments about when was the right time to enter property lending. Equally to some now is precisely the right opportunity to set out your criteria and appetite for new loans as competition in certain sectors is weak thereby allowing for better returns on moderate LTVs. Certainly landlords with Buy to Let and residential investment properties have felt the benefits.

The Aldermore Bank offering is simply presented as lending to 70% of value or purchase price on mortgage terms up to 25 years with interest only periods if only borrowing 50% or 60%. With a payrate of 5% and a completion fee of 1.75% this is market competitive and compares very favourably with some Buy to Let mortgages where completion fees of up 3.5% seem to be increasing...

The real benefit comes from their willingness to lend on HMOs, semi commercial properties and to Ltd Cos holding property. They will look at recent conversions or refurbishmenst purely on the merits of the new transaction without looking for the property to be held for a fixed period. They will also support young commercial owner occupier businesses at a time when the High Street Banks are increasingly nervous over too much exposure on property based lending.

Their Rent to Interest calculation is fairly robust but is more user friendly than the high street and on HMOs means that lending to 70% is a realistic option.

Finally, and of equal importance is their "short credit chain" with underwiters empowered to agree transactions with a credit team available at a moment's notice to give support to larger applications.

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