Copy article

Is HSBC adding another nail to the BTL coffin ?

Journalist: Newsteam, Newsteam

ended 31. August 2023

HSBC changing their mortgage products

With effect from Friday 1st September, we’ll be making the following change to our Buy to Let (BTL) Standard Variable Rate: 

  • BTL Standard Variable Rate increasing from 7.35% to 7.60%.    

    There is no change to our Residential SVR or any other interest rates at this time.

Would like to hear from the broker and lender community on this and feedback on the following:

  • Why Only Change the BTL SVR rate and not the Resi SVR rate at the same time?
  • Is HSBC locking in BTL clients to Product Transfer deals only, buy levering a higher BTL SVR? And if so are you seeing Product Transfer rates or fees quite high in comparison to remortgage deals elswhere ?
  • What are brokers' thoughts on lenders Resi and BTL SVR rates being so different in today's climate - Is BTL SVR's from lenders a way for lenders to make even more money off the unfortunate landlord ?
  • Why is there such a gap on lenders BTL variable rates - with Newcastle BS  showing at 5.94% and Barclays showing at 9.74% ? Are there genuine reasons or are these ways of generating additional profits , or trapping existing BTL landlords ?

 

 

3 responses from the Newspage community

Copy all

Copy

Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
I see this very much a way for lenders to control their existing BTL loan book - in a lot of cases, I'm seeing clients unable to remortgage to another provider and have to accept whatever Product Transfer deals are on offer from existing clients regardless of rate or fees applicable, due to ever-increasing SVR rates, which a lender chooses to increase or not. SVR rates are not governed by Bank Of England base rate rises, but in today's market, it's no surprise lenders are capitalizing on these increases.
Copy

Editor
Stephen Perkins
Managing Director at Yellow Brick Mortgages
This move from HSBC has two objectives, firstly it forces those landlords who can only product transfer to not sit on their Standard Variable Rate (SVR) and keep their options open, but to re-commit to HSBC and secondly to reduce the amounts of new buy-to-let business without impacting the residential business they still want.
Copy

Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Buy-to-let mortgages sit in a higher risk category than residential mortgages, which in turn means they are more capital-hungry than an equivalent residential mortgage for lenders to generate and hold on their balance sheets. The mix of business you have as a lender across different types of lending is a crucial component to your strategy and so having the ability to shift BTL and Residential SVR's independently of one another helps you to control the in-flows and out-flows of those business types to get the correct mix. Yes, you could just amend the deals you offer, but this generally has a "feast or famine" impact for High Street lenders like HSBC, amending the SVR and therefore the stress tests that work off the back of it allows a little more controlled adjustment of the business in-flows and therefore the overall business mix on the books.