On Friday 29 September, we will be implementing the changes to our buy-to-let proposition to align it with the PRA requirements for assessing buy-to-let mortgage applications.

I thought it would be useful to summarise the key aspects of our revised buy-to-let proposition for you.

• New and improved buy-to-let calculator hosted on our website which will make it easier for you to assess customers’ affordability.
• To ensure customers can afford all existing mortgage commitments we will require additional information on their other properties (residential and buy-to-let) to enable a full affordability assessment.
• For portfolio landlords (those owning four or more properties), we will require additional information about their existing buy-to-let and rented properties, their landlord experience, use of letting agents and future portfolio plans
• Revised Interest Coverage Ratio (ICR) calculation of 5.5% x 135%, reduced from 5.5% x 145%. We will continue to top-slice if there is a rental shortfall, taking into account any free personal income the applicant may have. In all cases, expected rent must continue to meet a minimum rental cover calculation of 5.5% x 125%.
• Redefining the maximum number of properties an applicant can own from ‘mortgaged’ to ‘rented’ but the maximum number remains at 4.
• New valuation service to assess rental demand and rental income for all other properties being let, with the results used to validate customer affordability.

These changes enhance our existing proposition which still includes criteria to support buy-to-let for first-time buyers, let-to-buy and consent-to-let.

On the application forms, hosted on our website and the MTE, you’ll find a number of new questions requesting further information from all applicants about their existing mortgage commitments and for portfolio landlords more detail about their buy-to-let plans. These new questions are mandatory and MUST be completed to progress the application.

We will also introduce several other enhancements to our buy-to-let proposition in Q4 that include:

• Increasing the total number of rented properties a landlord customer can own from 4 to 10. The total will include unencumbered properties and properties mortgaged with another lender.
• Increasing the maximum aggregate customer borrowing allowed from £2m to £3.5m.
• The current £50,000 minimum income for aggregated borrowing over £1m will be removed. All customers will be required to meet our standard buy-to-let minimum income of £25,000.

As a responsible lender, we have been able to make these changes whilst ensuring that we maintain our risk appetite and the quality of business we accept.