Octane Capital has returned to the specialist buy-to-let market with a range offering loans of up to £15m and gross LTVs of up to 80%, including fees.
The relaunch is the lender’s first product introduction since it was acquired by Aldermore Bank in March and is aimed at more complex cases, including portfolio landlords, foreign nationals and specialist property.
Octane will consider residential portfolio loans of up to £15m, alongside HMO lending of up to £3m and MUB facilities of up to £10m. There is no maximum number of bedrooms for HMOs or units for MUBs, subject to lending criteria.
INTEREST DEFERRAL RETURNS
The range also brings back Octane’s interest deferral option, under which borrowers can defer 1% a year of interest. The lender said this reduces the pay rate and could increase the LTV available within affordability limits.
Its top-slicing approach allows eligible borrowers to supplement rental income with personal income when meeting interest coverage ratio requirements. Under the arrangement, rent is required to cover 90% of interest at the pay rate.
Octane said this could be particularly relevant to high-net-worth borrowers purchasing lower-yielding property in London and the South East.
The lender will also accommodate light refurbishment where works are self-funded and cost no more than 10% of the property’s market value. For properties that are not tenanted, up to six months’ interest retention is available to provide time for works to be completed and tenants secured.
The product follows changes to Octane’s bridging range since the Aldermore acquisition, including the introduction of fixed rates, automated valuation models, dual representation and wider use of title insurance.
Jonathan Samuels (pictured), chief executive of Octane Capital, says: “Our buy-to-let product is back by popular demand. Brokers want somewhere to take the cases that require a closer look, whether that is a large HMO, a portfolio landlord or a borrower whose income needs to form part of the affordability assessment.
“The option to defer 1% a year in interest was hugely popular last time. Lowering the pay rate can help borrowers achieve a higher LTV on lower-yielding properties in London and the South East.
“Combined with top slicing for high-net-worth borrowers, it allows us to look at affordability beyond the rent alone.
“Since joining Aldermore, we have moved quickly to give brokers more options and make transactions easier. Bringing back Specialist Buy to Let is the next step, combining Octane’s approach to complex lending with the backing of Aldermore Bank.”
