Foundation Introduces Limited Edition Buy-to-Let Fixed-Rate Mortgages: What London Landlords Need to Know

What Has Changed?

Foundation, a specialist UK mortgage lender, has introduced two limited edition buy-to-let fixed-rate mortgage products at 75% loan-to-value (LTV). These new offerings include two-year fixed terms:

• Standard Product: 4.44% fixed rate
• Green Product: 4.34% fixed rate for properties with an Energy Performance Certificate (EPC) rating of A-C

Both products include a 4% product fee, but importantly no application fee and a free standard valuation. They target landlords with near-clean credit histories qualifying within Foundation's F1 range criteria.

Why This Matters to Private Landlords

In a market marked by volatility and rising interest rates, fixed-rate products offer predictability for mortgage payments, aiding cash flow management. The Green mortgage product’s slightly lower rate incentivises energy efficiency—a growing compliance and tenant expectation priority.

For London landlords, navigating tightening EPC compliance requirements, rent caps, and local licensing, these products present strategic financing options, especially for portfolios containing greener properties.

Who Should Consider These Products?

• Single-Property Landlords: Those with rental homes rated EPC A-C can benefit from reduced borrowing costs by opting for the Green product.
• HMO and Portfolio Landlords: Owners with mixed EPC ratings might selectively remortgage higher-rated properties to secure better rates.
• Accidental Landlords: Newcomers with clean credit and EPC-compliant properties may find this an accessible entry point due to reduced upfront costs.

Landlords with less-than-clean credit or properties rated below EPC C won’t qualify for the Green option and should explore other lenders or products.

Practical Implications

1. EPC Compliance: Properties must meet EPC A-C to access the Green mortgage. With minimum EPC requirements tightening (anticipated C rating minimum by 2025 for rental properties), upgrading early can unlock better rates and future-proof lettings.

2. Credit Criteria: Foundation's F1 range prioritises near-pristine credit. Early credit checks and resolving issues help avoid application delays or refusals.

3. Cost Savings: Waiving application fees and including free valuations lower upfront expenditure, easing financial pressures relative to other lenders.

4. Fixed Rate Term: The two-year fix provides stability amid rate uncertainty, but landlords should plan remortgage or exit options post-term.

Risk Mitigation and Strategic Planning

• Timing: Limited edition products may be short-lived. Assess eligibility and act promptly.
• Portfolio Review: Audit EPC ratings across holdings to identify upgrade or remortgage opportunities.
• Budget for Improvements: Consider cost and timing for EPC upgrades to meet or exceed EPC C requirements by 2025.
• Credit Health Checks: Conduct early credit reviews and remediate issues.
• Market Monitoring: Watch for similar limited edition offers as lenders increase energy efficiency incentives.

Next Steps for London Landlords and Property Teams

1. Assess Portfolio EPC Ratings: Identify which properties qualify for the Green product.
2. Check Credit Standing: Review borrower credit reports for F1 eligibility.
3. Calculate Financial Impact: Compare current financing with these Foundation products, factoring in fees, rates, and term duration.
4. Plan EPC Upgrades: Schedule improvements early to meet EPC C by 2025.
5. Engage Your Mortgage Advisor: Discuss product suitability aligned with your strategic goals.

How Rentals & Sales Can Support You

Our specialist team offers bespoke portfolio reviews, compliance audits focusing on EPC and regulatory requirements, and pricing strategy consultations. We help benchmark your properties, evaluate lending options like Foundation’s limited edition offerings, and plan financial and operational next steps.

Contact us to schedule your personalised portfolio health check and mortgage strategy session.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Landlords should consult with a qualified mortgage adviser and conduct due diligence before making lending decisions.