Following feedback from Brokers we’re pleased to announce that we’re making changes to our residential lending criteria to further support your Let to Buy clients.
What’s changing?
- We are changing the way we assess residential purchase applications for your clients who intend to let their existing property;
- From today, the outstanding mortgage on the existing property can be ignored in the affordability calculation if the property is going to be let out and the monthly rental amount meets a minimum of 145% of the mortgage payments at a stressed rate of 4.5%;
- If the rental income does not cover 145%, the shortfall amount must be included as an expenditure deduction in the affordability assessment.
Requirements
Applicants will need to provide:
- Evidence of consent to let for the existing mortgage or a copy of KFI/ESIS if the property is being re-mortgaged to a BTL;
- An Association of Residential Letting Agent (ARLA) letter confirming the anticipated rental figure.
