HSBC has rolled out significant updates to its domestic buy-to-let range, effective immediately, lifting loan-to-value (LTV) ratios to 80% in a move that could ease the strain for some landlords.
The changes come with conditions: a maximum loan of £400,000, properties needing an EPC rating of A to C, inclusion of let-to-buy options, and a rule barring booking fees from pushing LTVs beyond 80%.
Aaron Strutt, product and communications director at Trinity Financial, views it as a deliberate push to reinvigorate the sector.
“HSBC is clearly trying to boost the buy-to-let market and attract more landlords by reducing the deposit borrowers need to get an investment property,” he says. “Quite a few lenders are offering 20% deposit buy-to-let rates at a time when many landlords are either exiting the market or switching to limited company buy-to-lets.”
However, he warns that stringent rental stress tests could trip up some, noting, “If the rental income is not strong enough the requested mortgage loan size reduces and applicants will need to put down more of a deposit.”
He also flags HSBC’s competitive edge, with two and five-year fixes just above 4%, tempered by higher fees but balanced by lower-fee alternatives.
Sean Horton, managing director at Respect Mortgages, welcomes the move but questions its scope.
“It’s good to see HSBC backing the buy-to-let sector with this 80% LTV offering,” he remarks. “I think the £500,000 valuation limit is a mistake and too low. There are good quality properties above this cap and it won’t benefit many landlords investing in the London postcodes.”
With a sturdy rental market, he predicts others will follow, adding, “Many landlords need some additional flexibility after years of tax and regulatory changes squeezing their margins.”
Riz Malik, an independent financial adviser at R3 Wealth, sees a mixed picture. “HSBC has helped landlords but limits linger,” he says. “Their 80% loan-to-value move hints at growing market confidence but tight caps and EPC rules keep it selective. This will offer a lifeline to some landlords, but affordability remains a hurdle. Others may follow, but this isn’t a free-for-all—lenders are still playing it safe.”
Ben Perks, managing director at Orchard Financial Advisers, highlights the practical relief it could bring. “An 80% offering will free up some prospective buyers’ deposit money which may take the sting off the additional stamp duty they have to pay,” he explains. “This will be an attractive option for many as long as it’s priced reasonably. Buy-to-let lending has been hit hard recently and lenders need to innovate to compete, so it’s great to see HSBC taking a step forward.”
With Moneyfacts reporting a record number of buy-to-let products on offer, HSBC’s tweak could stir competition, though its selective criteria suggest a cautious optimism rather than a full-throttle plunge into the market.
For landlords feeling the pinch, it’s a potential lifeline—just not for everyone.