"Landlords are an essential part of a viable property market, and our latest product offering aims to provide specialist solutions to help landlords remain in the market"
- Paul Adams - Pepper Money
Pepper Money has unveiled a new mortgage product aimed at landlords operating Houses in Multiple Occupation (HMOs), marking a further step in its renewed focus on the buy-to-let market.
The specialist lender is making the new mortgage available to both individual landlords and limited companies, provided applicants have at least 12 months of homeownership experience. The product applies to licensed HMO properties with up to six bedrooms.
Pepper’s affordability assessments will be based on Interest Coverage Ratios (ICRs) as determined by an independent RICS valuation. No business or personal bank statements are required, and multiple sources of deposit funding, such as gifts, director loans and existing equity, are accepted. Credit scores are not used in application assessments.
This new offering follows Pepper Money’s return to the buy-to-let market earlier in May and reflects its ambition to support landlords looking to expand or diversify their property portfolios. The product is available on portfolios of up to 10 properties, with rates starting at 5.19% and a maximum loan-to-value of 75%, applicable to properties with an EPC rating of A to C.
The term lengths go up to 35 years, and lending is available to applicants up to the age of 85. According to the lender, this makes the product suitable for a wide range of landlords, whether they are at the beginning of their investment journey or seeking to generate income in later life.
Pepper’s underwriting process considers a broader set of criteria than traditional lending approaches, aiming to create a fuller picture of a landlord’s financial position. The company says this approach makes its mortgages more accessible, particularly in a lending environment that is growing more complex.
“Our new HMO product is the latest in a series of new developments centred around supporting landlords," comments Paul Adams (pictured), sales director at Pepper Money. “As a specialist lender providing specialised products, we know that landlords are operating within an increasingly complex regulatory environment and navigating affordability challenges which are affecting their behaviour.
He added, “While traditional credit checks are valuable, our approach offers a broader view of financial health, promoting responsible lending and renting practices. HMOs play a vital role in the UK’s private rental market, offering an affordable and accessible option in the face of rising rental demand and a growing gap between the amount of supply available. Landlords are an essential part of a viable property market, and our latest product offering aims to provide specialist solutions to help landlords remain in the market."
“Pepper Money is committed to developing a broad range of products and services and working collaboratively with brokers, with a streamlined underwriting process, delivering competitive rates and high-quality service for a section of the market that is so often overlooked by high street lenders.”
