The Mortgage Works (TMW) has increased the maximum loan to value (LTV) it will accept for new build flats – raising their cap from 65% to 75%. The changes came into effect on April 26th, 2022, with a view to assisting landlords in improving the energy efficiency of their property portfolios given that new build flats tend to have an EPC rating of B or higher.
As new EPC legislation stating that all new tenancies must have an EPC rating of C or above is set to come into effect in 2025, TMW have increased their maximum LTV on new build flats to encourage landlords to update their portfolios and buy more energy efficient new build flats, with all existing tenancies having to follow suit by 2028.
New Build Hub
TMW is also launching a new build hub – a new feature that will contain useful information for anyone looking to apply for a buy-to-let mortgage on a new build property. The hub will include features such as a list of criteria, tips on how to submit an application and borrowing calculators.
In addition to this, TMW have also said that in order to support brokers and landlords alike, it would ring fence any application from the point when a valuation is received to the point where an offer is issued so that they can meet developer deadlines more easily.
Head of intermediary support and new build at TMW, Andy Dean, has said that increasing the maximum LTV on new build up to 75% would make properties with a higher energy performance standard “more accessible” for landlords to buy.
He continued: “Furthermore, as a lender that recognises the specialism and time pressure associated with the new build sector, the launch of our new build hub and ring-fenced process helps brokers and landlords find everything they need to support them with applying for a buy-to-let mortgage on a new build property, with the added confidence of a timely progression.”
The Mortgage Works
This move from The Mortgage Works comes just weeks after Skipton Building Society increased its maximum LTV to 90% on new build flats back in February. The move shows a clear pattern within the market, and that lenders are increasingly more interested in the prospect of lending for new build flats. As demand for new build property continues to climb with housing in short supply, lenders are beginning to look more favourably on new build flats as buyers become more conscious of energy efficiency amid the cost-of-living crisis and the wider battle against climate change