Valuation and application fees have been scrapped for all buy to let products by Paragon, in a revamp of their landlord range.
For a limited time, Paragon has opted to remove the normal application fee of £150 as well as the accompanying valuation fee. The temporary change comes as the company launch four new two-year fixed rate portfolio products, each starting at 2.99 per cent at 75 per cent loan to value for any single, self contained unit, or 3.2 per cent for houses in multiple occupation (HMOs) or multi-unit blocks.
Managing director for mortgages at Paragon, John Heron, explained: ‘It’s important to us that our buy-to-let products represent the very best value and choice to our landlord customers and intermediary partners. This offer, whilst only available for a limited time, does just that and we hope it will be a welcome piece of good news for landlords in an otherwise challenging market of late.’
Paragon are the latest in a string of lenders adding incentives to their buy to let products after the introduction of tax and regulatory changes for portfolio landlords. In October, Keystone relaxed several of its buy to let criteria, whilst Mansfield Building Society opted to take into account a landlord’s personal income when assessing affordability.
The introduction of a 3 per cent stamp duty surcharge for additional property purchases in April 2016 was a significant blow for the buy to let sector, as was the decision to gradually phase out income tax relief for landlords by 2020, a process that began in April 2017.
The Prudential Regulation Authority’s (PRA) introduction of increasingly stringent affordability rules on 1 January this year added to the mix, as did the stricter underwriting guidelines for portfolio landlords which were introduced at the end of September.
A combination of these factors has led to concern that buy to let investors will begin selling up in response to the changes.
Director at London-based Mortgage Concepts Associates, Mike Richards, said: ‘This will help portfolio landlords who, at the moment, are almost out in the cold. It is always nice to have no valuation fee – especially in the London area, where it makes a big difference to what you have to pay up front. To not have an application fee and not pay anything up front to assess the case is a good idea. It will help Paragon drum up business – and their rates are not bad, either.’