At Leeds Building Society we have responded to the PRAs supervisory statement on underwriting standards for Buy to Let (BTL) properties by changing our criteria on BTL mortgages.

We’ve assessed our income coverage ratio (ICR) taking into account mortgage interest tax relief. As of 1st January 2017 we have increased our ICR for BTL mortgages from 125% to 140%.
Our affordability stress test rate will be 5.50% for purchase and remortgage applications where there is additional borrowing.

Where the applicant is remortgaging and there is no additional borrowing, our affordability stress test rate is reduced to 5.00%.

For BTL our previous minimum income requirement of £25,000pa (or £40,000pa for joint applicants) will be removed meaning no minimum income requirement. However, there remains a requirement for the applicant to evidence an income.

In addition, we are reducing the documentation requirements for BTL applications, with applicants now only required to provide their last monthly bank statement and proof of income*.
BTL mortgages are still available up to 70% LTV.

Where existing Leeds Building Society BTL customers come to an end of their existing deal and wish to take a new product with the Society, an ICR assessment is not required where there is no additional borrowing.

In terms of our Holiday Let proposition, as of 1st January 2017 we have increased our ICR from 125% to 140% and changed our affordability stress test rate to 5.50%, all other Holiday Let criteria remains unchanged.

For more information on our Buy to Let proposition contact your local Business Development Manager, you can find their contact details here. While you’re at it why not follow us on Twitter or join our LinkedIn® professional networking services group.

See the infographic here.

*Income verification; Employed – latest month or 4 weekly payslips; Self Employed – An accountants certificate, last year’s full accounts or last year’s SA302 and tax year overview.
This information is for use by FCA authorised intermediaries only and must not be distributed to potential borrowers.