Released on: March 31, 2008, 7:32 am

Press Release Author: Mortgages for Business

Industry: Financial

Press Release Summary: Renovated properties and deposit size are affected

Press Release Body: Mortgages for Business, the specialist buy-to-let mortgage
broker, is reporting a number of new criteria changes amongst the UK\'s buy-to-let
lenders which will affect funding for newly renovated properties classed as \'new
builds\'and also the deposit size now required for most loans.
New builds which many lenders also classify as properties, flats or houses built or
converted in the last twelve months have been a particular cause of anxiety for href=\"http://www.mortgagesforbusiness.co.uk/\">buy to let lenders, and it is
increasingly common for lenders to refuse to lend on this type of property
altogether. Capital Home Loans are the latest organisation to decline to lend on new
builds including newly converted properties.

Jonathan Moore, head of Marketing at Mortgages for Business comments: \"New builds is
the one area of concern in the sector, particularly in some city centres where
supply is currently outstripping demand. It is essential however not to judge the
whole buy to let investment proposition on the performance of new builds.
Established properties and particularly HMOs and flats above commercial properties
provide good long term yields. The fact that renovated flats and houses in the last
twelve months are classed as a new build may be of surprise to many investors\".

The second major change is the size of deposit required. Some lenders are now asking
investors to put down larger deposits by lowering the maximum loan to value they
will lend at. For example UCB Home Loans (the specialist buy to let lender of
Nationwide) is asking borrowers to put down a 25% deposit, from the previous
requirement for a 15% deposit. Meanwhile Irish Permanent has lowered their maximum
loan to value to 80%, meaning there is a requirement for a 20% deposit. Mortgage
Express (The UK\'s largest buy to let lender according to Council of Mortgage Lender
statistics) have also withdrawn their 90% loan to value buy to let products.

Jonathan Moore continues: \"In the last five years buy to let lenders have lent at
85% loan to value, with many lending up to 90% loan to value last year. However
some lenders are now introducing a maximum loan to value of 75% or 80%. The move is
not widespread across the marketplace as yet but some lenders are making definitive
moves to increase deposit requirements\".

First time investors are also likely to find their href=http://www.mortgagesforbusiness.co.uk/>buy to let mortgage options
decreasing. The Mortgage Works will no longer be lending to first time landlords, a
stance also taken by UCB Home Loans.

It remains to be seen if these changes will become the market norm and if other
lenders will follow suit.

Jonathan Moore continues: \"The changes cannot solely be attributed to lender worries
about the credit crunch and the need to ensure loans are as prime as possible. The
credit crunch has meant fewer organisations are lending because securitised lenders
are having difficulties securing funds at a competitive enough rate to re-enter the
market. This means the lenders remaining are receiving a higher number of
applications and as result have been lending in elevated volumes. We view these
measures as a short term mechanism to lessen the volume of applications there are
receiving, allowing them to achieve lending volumes they are more comfortable with\".

-Ends-

For more information call Mortgages for Business on 0845 345 6788 or visit
www.mortgagesforbusiness.co.uk

Notes
Mortgages for Business are independent experts in buy-to-let and commercial
mortgages managing single and multi-let property portfolios for thousands of UK
investors. Its brokers have access to a large portfolio of fixed and variable
interest rate mortgages from a panel of over 30 lenders and offer truly independent
advice that is appropriate to investors.


Web Site: http://www.mortgagesforbusiness.co.uk

Contact Details: Jonathan Moore, Head of Marketing
Mortgages for Business
Tel: 01732 471600 / 07810 717421
Matt Baldwin, Coast Communications
Tel: 01233 503200 / 07930 439739