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Landlords struggling with rising costs and tighter margins are being given a significant boost to help unlock funding in a high-cost market.
The change comes at a crucial time for property investors, particularly in the South of England where rising costs and tighter yields have limited borrowing potential. Now, brokers say previously out of reach deals are back on the table, as Redwood Bank’s support unlocks high-value loans.
Mark Dobson, Head of Business Development (South and London), said: “This is exactly the kind of market intervention that landlords need right now. My team in the South have already seen the benefits for our brokers and borrowers with notable increases in LTVs available.”
Redwood is already discussing cases with its brokers that demonstrate the impact of these affordability changes. Some examples of how these changes could help brokers and their clients achieve the leverage they need include:
Changes to cost deductions could release an additional £40,000, a 6% increase in LTV for refinancing a buy-to-let property.
The option to now have a 5% fee on a lower rate three-year fixed term could help a client refinance a large HMO with a 15.5% increase in LTV available
For a commercial deal an additional 4.9% LTV is available for the client to acquire new premises
Mark said: “It’s a game-changer for landlords wanting to progress deals and fund their next move.”
The maximum enhancements in LTV now possible thanks to these changes are:
Buy-to-let: up to 16% extra LTV
Semi-commercial: up to 18% extra LTV
HMO: up to 21% extra LTV
Commercial: up to 8% extra LTV
The variations are driving results across the South, where tighter yields have often limited how much landlords and SMEs can borrow.
The changes stem from two targeted adjustments:
Removal of automatic cost deductions in affordability assessments
Reduction of stress rate assessment for 2- and 3-year fixed terms
The option to use the higher 5% fee for 2- and 3-year fixed terms
Together, these updates are helping to unlock more leverage for landlords looking to refinance, release equity or fund new purchases.
Mark said: “There’s strong broker interest in these affordability improvements. I spoke to countless brokers at the recent NACFB Expo, about the ‘affordability boost’ and how it’s enabling better outcomes for their clients across the country, but especially the South East.”