Since the PRA introduced tighter affordability assessments on buy to let mortgages, you may be struggling to expand your property portfolio or have been declined a remortgage on a property. If this is the case then hopefully we can help.
There has been a raft of new requirements from lenders which has made the process of remortgaging or purchasing buy to let properties more complex. The lender now needs to assess a landlord’s full portfolio, if they have four or more mortgaged properties, and not just the property they are looking to secure borrowing against. This has resulted in far more evidence being required to assess income, cashflow and future ambitions; plus either the entire portfolio or part of it will need to pass the lender’s stress test.
The biggest headache to landlords looking to expand their property portfolio by far though has been the introduction of higher rent to interest calculations which has resulted in landlords being able to borrow a lot less than before.
Whereas previously landlords favoured two or three year fixed deals, five year fixed deals have rose greatly in popularity because the affordability assessment is more relaxed allowing the landlord to borrow more whilst providing a greater level of certainty in the current financial climate.
Most well-known high street lenders have decided to remain cautious, limiting the number of mortgaged properties allowed with them or with other lenders to three. Specialist lenders tend to have always manually underwritten cases, meaning they already have the experienced staff in place to cater to landlord’s with complex incomes, limited company structures or large portfolios.
Some specialist buy to let lenders can consider: –
And don’t worry, specialist doesn’t mean expensive. These lenders are competing with some of the well-known high street lenders when it comes to rates, cash back incentives and exclusive deals.