Buy-to-let mortgages appear to be slowly returning to the borrowing limits previously seen before the credit crunch, as broker London & Country is offering a mortgage with an 80% loan-to-value (LTV).

The mortgage deal is a three-year fixed rate of 6.49%, with a fee of £995 on a maximum LTV of 80% and is being funded by the Saffron Building Society. It would mean monthly repayments of £1,012 on a £150,000 repayment loan or £811pcm on an interest-only basis.

David Hollingsworth of London & Country, told PIN: ” Before the crunch hit, buy-to-let lenders had typically been advancing up to 85% of the property value and this was gradually being stretched out to 90% by some lenders. The specialist lending sector felt the force of the economic storm first and many lenders have withdrawn from the market. Those still lending in the buy-to-let market have pulled in their horns and the maximum level of borrowing has been pulled back to a maximum of 75% LTV with the better rates only available to those with even bigger deposits. This is a similar trend as that seen in the owner occupier market where borrowers still need bigger deposits, especially to bag the best rates although if anything the restrictions are even greater in the buy-to-let market.

“However there have been some small signs of encouragement and recent weeks has brought about some improvements in lender criteria. Our exclusive deal offers a maximum LTV to those remortgaging of 80% LTV. The deal is a three-year fixed rate at 6.49% with a £995 fee.

“Other lenders including The Mortgage Works, Platform and Nottingham BS have all improved criteria or product pricing recently. However, it can’t be ignored that the market remains constrained with far fewer active lenders in the buy-to-let market, which will continue to restrict the availability of mortgage finance.“
Nottingham Building Society improved the LTV on its buy-to-let mortgages for both remortgage and purchase, up to 70%. Whilst Platform, part of Co- Op/Britannia, sliced up to -0.3% off its buy-to-let fixed products.