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Posted on June 21, 2016

Buy to Let mortgage appraisal

With recent changes in Taxation and comments from the PRA (Prudential Regulation Authority) many lenders have reconsidered their sensitivity calculations, with some now requiring up to 145% rental cover v payments at a sensitivity rate of c.5.5%. This clearly demonstrates that The Bank of England and the PRA have concerns over the Buy to Let market.

This market is typically funded on interest only mortgage on variable or short term fixed rates and therefore may be susceptible to changes in interest rates in the medium term. By introducing an affordability test constrains lenders in the value of the loan that a particular rental income can service. Therefore, recommending a higher or stricter test levels, should reduce the amount of debt in the market and help protect both lender and borrower in an economic downturn, or during a period of rising interest rates.

A potential solution?

Whilst we believe lenders should be prudent, they are not forced to follow the rates stated above. At Pinpoint finance we now have access to a product where  the sensitivity calculation can be worked out against a reversion rate of 3.98%. This means that the product could be used to access a Loan to Value up to 80% which will broaden the appeal to the Buy to Let market. Please get in touch if you think this may of interest to you: info@pinpoint.finance

 

 

 

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Pinpoint Finance

01904 866 100

Keith: 07547 540 541

Kelvin: 07826 603 635

Anna: 07442 775 270

hello@pinpoint.finance

Pinpoint Finance

01904 866 100

Keith: 07547 540 541

Kelvin: 07826 603 635

Anna: 07442 775 270

hello@pinpoint.finance

York Eco Business Centre, Amy Johnson Way, York YO30 5AG

York Eco Business Centre
Amy Johnson Way, York YO30 5AG

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Pinpoint Finance is Authorised and Regulated by the Financial Conduct Authority (FCA), reference number 733225. Click here for the FCA website.

Pinpoint Finance is a credit brokerage and not a lender and is registered with the Information Commissioner’s Office number ZA146757.

Commercial Mortgage Broker York North Yorkshire. Refinancing premises, funding new lease or building, raising collateral.  Great customer service for your next real property asset investment.
Pinpoint Finance is a trading style of Pinpoint Commercial Finance Ltd, a company registered in England and Wales, number 9825825. Registered Address: 3-4 Park Court, Riccall Road, York YO19 6ED.

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