Fixed rate ending, want BTL, but bank forcing my hand.....

sarah3891

Hello,

I'm after some advice.

I own my own home with my husband, a joint mortgaged property which we have owned for 3 years.

I also own the flat I lived in prior to our house purchase, which I have owned for ten years. This is currently rented out on a consent to let basis with the bank. I had hoped to keep this as part of my pension pot for the future.

Upon the last consent to let renewal (June) the chap I spoke with at my bank advised I may need to consider a BTL mortgage in the future if the intention was to not move back into the property. As my fixed term on this mortgage has now ended; although the consent to let is still valid until next summer, I thought; being pro-active, I'd call them and discuss my options now.

However, I fall 3k short of their minimum salary requirements (£50k), and was advised they would not be able to help me. So in effect, from that particular bank's point of view, it feels as if they are forcing my hand to sell the property at some point in the future.

I appreciate every case is treated on it's own merit, so yes, I do understand that on the face of it, I am not an ideal prospect if I don't meet their salary criteria, but now I find myself in a real bind.

Candidly, the property has lost a lot of value since I purchased it due to the regional falls in value. However, as a rental income, it yields well against my existing mortgage payments (understanding this is personal mortgage terms not BTL) so we have no inclination nor real desire to sell, at least, not until see a little lift in value (yes, the utopic view everyone has of course). The rental market in the region is also very strong, as low average incomes in the area make property purchase out of reach for many, so the rental market is very buoyant here.

But it is this loss of value that means any other lender would probably laugh us out of the building for a BTL as we're probably now looking somewhere between 80 and 85% LTV when at purchase, my deposit was almost 30%. I'm worried a stern valuation may even present a figure nearer 90% LTV.

I just can't believe that this is an unusual position for someone to be in (e.g. buying a property with a partner but not wanting to sell the old one, and are financially able to support both mortgages comfortably, even without rental income?) and I wondered what others' experiences were/have been? Has anyone's previous/current lender denied the option of BTL and how did you fare elsewhere?

Many thanks all.

Thrugelmir

If you don't meet the lending policy of your current lender then there's nothing you can. Other than remortgage or sell the property. CTL is only ever granted on a temporary basis. Historically 3 years.

Ideally you need to pump more equity into the property to improve the LTV. As at the moment sounds as if you will struggle to obtain even a BTL mortgage. Try a local mortgage broker as they might know of a lender offering high LTV on BTL.

holly_hobby

As soon as you went onto CTL you fall outside of regulation.

CTL is only ever meant for short term (typically 3 yrs) and is really to address accidental landlord issues - the fact you've been lucky enough to have had this arrangement for over a decade means that you've little negotation left with this.

There are BTL lenders that don't have a min income requirement (50k min sounds like HSBC, most whom do have a min set it at 25k), although there are other income parameters. If you're unable to bring down the LTV from 90% to circa 80%/85% (which will be available as an experienced landlord), you'll struggle to place this, and you may indeed have to sell if you can't find a home for it.

Speak to a mge broker whom will asses the figs, and which current BTL lenders you will fit.

Hope this helps

Holly x

sarah3891

holly_hobby wrote: »

As soon as you went onto CTL you fall outside of regulation.

CTL is only ever meant for short term (typically 3 yrs) and is really to address accidental landlord issues - the fact you've been lucky enough to have had this arrangement for over a decade means that you've little negotation left with this.

There are BTL lenders that don't have a min income requirement (50k min sounds like HSBC, most whom do have a min set it at 25k), although there are other income parameters. If you're unable to bring down the LTV from 90% to circa 80%/85% (which will be available as an experienced landlord), you'll struggle to place this, and you may indeed have to sell if you can't find a home for it.

Speak to a mge broker whom will asses the figs, and which current BTL lenders you will fit.

Hope this helps

Holly x

Thanks Holly, apologies if it wasn't clear, CTL has only been needed for 3 years....

Will have a chat with a mortgage broker as our CTL term ends.... Thanks xx