Family Building Society Reintroduces 60% LTV Mortgages and Cuts Rates: What London Landlords Need to Know

What Has Changed?

Family Building Society has brought back owner-occupier mortgages at a 60% loan-to-value (LTV) level, alongside rate reductions of up to 0.3%. These changes apply to various mortgage options, including capital & interest, interest-only, product switches, and further advances. Additionally, buy-to-let fixed rates for two- and five-year terms have decreased by 0.25% and 0.15% respectively.

Why This Matters to Landlords

While the 60% LTV reinstatement directly targets owner-occupiers, the cut in buy-to-let fixed rates affects landlords more immediately. Lower fixed rates can improve cash flow or increase borrowing capacity, particularly for portfolio landlords or accidental landlords considering remortgage or expansion. The availability of a 60% LTV owner-occupier product may indirectly influence the wider mortgage market by nudging lending criteria and rates.

Practical Implications Across Landlord Profiles

• Portfolio Landlords: Reduced BTL rates on fixed terms may create opportunities to refinance existing mortgages, especially if current rates are above Family BS's new offers. This can lower monthly outgoings or free up capital for acquisitions.

• Single-Unit and Accidental Landlords: Those who recently inherited a property or converted their owner-occupier home into a rental might benefit from the 60% LTV owner-occupier products if they revert to owner occupation or for product switches.

• HMO Operators: While not directly impacted by 60% LTV owner-occupier products, HMO landlords can explore the lower BTL fixed rates for relevant mortgage products, though eligibility criteria may vary.

Actionable Steps for Landlords

1. Review Existing Mortgage Terms: Compare current mortgage rates and LTVs against the new Family BS offerings to identify potential savings.

2. Engage Mortgage Advisors: Consult your mortgage broker or lender to verify eligibility for the new 60% LTV products or reduced BTL rates, particularly for remortgage or further advances.

3. Update Financial Planning: Adjust cash flow forecasts and acquisition strategies to reflect possible interest savings or enhanced borrowing capacity.

4. Compliance Check: Ensure any mortgage switches or further advances comply with lender and regulatory requirements, updating your advisory materials accordingly.

5. Communicate with Tenants if Relevant: If refinancing affects rental terms or property management, maintain transparent communication to manage expectations.

Monitoring and Next Steps

Keep an eye on market responses to Family BS's reintroduction of 60% LTV and rate cuts, as other lenders may adjust offerings accordingly. Confirm all mortgage product details directly with Family Building Society or official communications before making decisions.

How Rentals & Sales Can Support

Our team offers comprehensive portfolio reviews, compliance audits, and tailored mortgage advisory services to help landlords capitalise on market shifts like these. We can assist in analysing the impact on your holdings and recommend strategic moves to optimise your mortgage arrangements and rental income.

Compliance Disclaimer: This article is for informational purposes only and does not constitute financial advice. Landlords should seek professional mortgage and legal advice before making decisions.