The Mortgage Works (TMW) has shaken up the BTL lending market by making improvements to the affordability assessment applied to portfolio landlords.

As one of the largest buy-to-let providers, it has increased the maximum aggregate loan to value (LTV) for those with more than 10 buy-to-let properties from 65% to 75% and has also reduced its stress rate used across the portfolio from 5.25% to 5%.

Dan Clinton, head of specialist lending, says these latest changes follow last week’s rate cuts for larger portfolio landlords. He adds: “We always value and listen to feedback and hope these latest changes demonstrate TMW’s commitment to portfolio landlords, brokers and the buy-to-let market.”

TMW hasn’t historically lent to larger portfolio landlords, says Lee Grandin (pictured) of Landlord Mortgages, who explains that specialist lenders such as The Mortgage Lender and Capital Home Loans have been the main players in this area.

Bigger landlord

“Now there’s a lender who’s very good with pricing, attracting the bigger landlord market,” he tells LandlordZONE. “I think lenders feel confident about lending, particularly to those landlords who are likely to sustain through a very difficult period.

Maybe they see the market is changing and it’s one they need to be in. It could potentially make it awkward for specialist lenders – whether they have the pricing to compete is doubtful.”

The lending environment is tricky for some smaller landlords who paid an average of 37% of their rent on mortgage interest in August, up from a low of 24% in November 2021, according to Hamptons.

Meanwhile, Savills reports that profitability has plummeted for those taking out a new mortgage since the first quarter of last year.