Landbay’s New 70% LTV Deals and Reduced Small HMO Rates: What London Landlords Need to Know

What’s New From Landbay?

Landbay, a specialist buy-to-let lender, has introduced eight new five-year fixed rate mortgage products at a 70% loan-to-value (LTV). Additionally, it has lowered rates on two-year fixed rate deals at 75% LTV specifically for small Houses in Multiple Occupation (HMOs). These changes include refinancing options with product transfers, making it easier for landlords to switch deals without remortgaging.

The new Premier range is competitively priced with fees tailored for both individual landlords and limited companies holding up to 15 mortgaged properties. This is a notable development given the typical financing challenges for smaller HMO landlords.

Why This Matters to London Landlords

Landbay’s updated offerings are significant for several reasons:

• Improved Affordability: Lower rates on small HMO products reduce borrowing costs, helping landlords improve net yields.
• Portfolio Flexibility: The Premier range’s cap at 15 mortgaged properties covers many small portfolio landlords and accidental landlords who may have scaled up.
• Refinancing Opportunities: Product transfer options mean landlords can switch to better rates without the cost and hassle of full remortgages.

In London, where rental demand for HMOs remains strong due to high housing costs and transient populations, these deals can enhance portfolio viability.

Practical Implications by Landlord Type

• Single-Unit Landlords: While primarily aimed at small HMOs, the 70% LTV five-year fixes may offer attractive terms for those refinancing or purchasing single flats or houses.

• Small HMO Landlords: The reduced rates on 75% LTV two-year fixes are particularly advantageous. Given that small HMOs often face higher lending costs due to increased risk profiles, these deals can materially lower monthly repayments.

• Portfolio Landlords (up to 15 mortgaged properties): The Premier range’s design to accommodate up to 15 mortgaged properties means landlords with modest-sized portfolios can benefit from competitive pricing tailored to their scale.

• Accidental Landlords: Those who have inherited or otherwise acquired a few properties might find refinancing into these products a cost-effective way to stabilise finances.

Numbers and Benchmarks

Landbay’s new deals were announced in early June 2024, with exact rates varying by product but reportedly among the most competitive currently available for these LTVs. Landlords should compare these rates with their existing mortgage costs; for example, a 0.25% reduction on a £200,000 mortgage can save approximately £41 per month before tax.

As mortgage pricing can vary based on credit profile and property specifics, landlords are advised to obtain personalised quotes. Local market brokers or mortgage advisers can benchmark these deals against other lenders offering similar LTV and product lengths.

Recommended Next Steps

1. Review Existing Mortgages: Identify current mortgage terms for all buy-to-let properties, focusing on those nearing the end of fixed terms or higher interest rates.

2. Assess Portfolio Suitability: Determine if your portfolio fits within Landbay’s Premier range criteria (up to 15 mortgaged properties) and if any properties classify as small HMOs.

3. Engage a Mortgage Adviser: A specialist buy-to-let mortgage broker can provide tailored comparisons and help navigate product transfer options.

4. Calculate Potential Savings: Use mortgage calculators or adviser tools to estimate savings from switching to Landbay’s new deals.

5. Plan for Application Timing: Mortgage applications and product transfers can take 4–8 weeks; start early to avoid lapses in fixed terms.

6. Communicate With Tenants: If refinancing leads to operational changes or rent reviews, prepare clear tenant communications to maintain trust.

7. Monitor Further Market Updates: Keep an eye on other lenders’ responses to Landbay’s moves to ensure ongoing competitiveness.

How Rentals & Sales Can Support

Our team can conduct a detailed portfolio review to identify refinancing opportunities and compliance checks. We also offer pricing strategy advice to align mortgage costs with rental income, helping maximise returns. Whether you manage a single property or a small portfolio, we provide bespoke guidance to optimise your landlord operations.

Compliance Note

This article does not constitute financial advice. Landlords should seek independent mortgage advice tailored to their circumstances. Ensure compliance with all mortgage lender requirements and local regulations when refinancing or purchasing properties.