Hodge has restricted its holiday let lending to non-portfolio landlords while upping stress rates for purchases and remortgages.
In a change of criteria, Hodge, which recently rebranded its 50+ mortgage deals, will no longer accept applications from investors who have four or more properties excluding their primary residence.
At the same time, the lender has increased its stress rates. Stress rates for five-year holiday let products and pound-for-pound remortgages will increase to a maximum of pay rate +2% or 5.5%. There is no change to the two-year stress rate. Meanwhile, the interest coverage ratio (ICR) will be reduced across the board from 145% to 140%.
The lender has reintroduced its five-year fixed rate holiday let range, added a two-year fix, and reduced rates on two-year deals by 95 basis points (bps).
Rates have also been reduced across the holiday let retention range by up to 83bps.
James Enos, national account manager for Hodge, said: “It’s been nearly five years to the day since we launched our first holiday let product at Hodge, and a lot has happened in the holiday market in that time.
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“Despite the difficulties the holiday let market has seen in recent years, it is still a popular investment option for many. Our products also allow investors to rent their holiday lets on Airbnb and stay at their properties for up to 90 days with no minimum income requirements, increasing their popularity.”
