Non-conforming BTL slammed for being too risky

One product, offered by Beacon through Bananas Inc, has an initial rate of 7.75 per cent and was particularly

lambasted by one industry source, who wished to

remain anonymous.

“They are trailing in murky depth as any investor at 7.75 per cent is high-risk business for both the landlord and the lender. Even at 100 per cent rental cover, the landlord must charge a huge rent to service the loan and if they have one void period, that will ruin the chances for future borrowing.”

Jon Burridge, managing director at Quantum Mortgage Brokers, believed any loan would need to have enhanced criteria because the rate could be uncompetitive compared with prime

landlords.

“There has to be a unique selling point in the criteria to put these products with high rates out there as they are not going to get a look-in on rates alone. Also, a lot of lenders won’t take on adverse BTL if there are ongoing credit problems.”

Sue Cox, business manager at Bananas Inc, insisted it was about offering a solution to every client.

“At the end of the day we are a mortgage packager and we offer a range of products. If a broker is unhappy about a market then that’s fine but there is always a broker with a client who requires it and we try to meet that need.”