Redwood Bank has revamped its product affordability criteria to increase the leverage available to landlords.
The bank has removed automatic cost deductions from this criteria, and reduced stress rate assessments for two- and three-year fixed-rate products.
As a result, LTVs for BTL and HMO products are expected to increase by up to 16% and 21%, respectively.
Redwood also expects LTVs to increase by up to 18% and 8% for semi-commercial and commercial products.
“Professional landlords have handled many challenges in recent times, including elevated interest rates that have eroded their returns and reduced their leverage, notably in the South where property yields are lower,” said Tom Worbey, senior lending product manager at Redwood Bank (pictured above).
“We knew we needed to act to help support them to achieve the leverage they need in this current interest rate environment in order to continue to invest in and grow their property portfolios.”
