Shawbrook Bank Expands Lending Products for Landlords and Commercial Properties

Key Developments:

  1. MUFBs for First-Time Landlords:
    • Expansion: Shawbrook Bank now allows first-time landlords to acquire Multi-Unit Freehold Blocks (MUFBs) up to six units.
    • Objective: This move aims to support new market entrants in building diverse property portfolios, which include buy-to-let, houses in multiple occupation (HMO), and MUFB properties.
  2. Increased LTV for Industrial Properties:
    • Enhanced Lending: The bank has increased the maximum loan-to-value (LTV) ratio to 75% for industrial properties.
    • Terms: Loans are available on interest-only, part-capital, or full capital repayment terms, with rates starting from 7.39% at 75% LTV.
    • Purpose: This change is designed to help landlords diversify their portfolios with commercial properties.
  3. Improved Options for Social Housing:
    • Social Housing Focus: Shawbrook has enhanced its lending options for properties let to social housing or supported living operators.
    • Complex Buy-to-Let Products: The lender’s products now cater to single-let or HMO properties in the social housing sector.
    • Aim: This enhancement responds to the growing demand for social housing in the UK.
  4. Acquisition of Property-Owning Company Shares:
    • New Criteria: Shawbrook introduced new lending criteria for landlords wishing to acquire shares of a property-owning company instead of individual properties.
    • Flexibility: There is no minimum loan size required for these acquisitions.
    • Benefit: This offers landlords more flexibility in expanding their property portfolios through different acquisition methods.

Strategic Intentions:

  • Market Adaptation: The enhancements reflect Shawbrook’s commitment to adapting to the evolving needs of professional landlords, particularly in a higher interest rate environment.
  • Diversification: By expanding their criteria, Shawbrook aims to create more opportunities for landlords to diversify and grow their portfolios, whether through higher-yielding residential assets, commercial properties, or social housing.
  • Support for Landlords: The goal is to offer innovative and flexible solutions that support clients at every stage of their investment journey.

Insights from Daryl Norkett, Head of Proposition at Shawbrook:

  • HMO Demand Increase: The bank has observed a significant rise in HMO demand, from 27% of their buy-to-let originations in 2022 and 2023 to 34% in 2024.
  • Commercial Property Interest: Research indicated that 37% of landlords seeking portfolio expansion were interested in commercial properties for diversification.

Shawbrook’s enhancements demonstrate a strategic response to market trends and landlord needs, emphasizing flexibility, support, and adaptation to current economic conditions

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