Tag Archives: buy to let mortgage restrictions

Landlords face buy to let mortgage restrictions

Landlords are expected to face buy to let mortgage restrictions after one lender changed its criteria to demand that rental income was increased before a loan is agreed. The Mortgage Works said it is increasing the amount of rental cover required – which is how much a landlord needs to receive in rent in relation to their mortgage repayments – from 125% to 145%. In addition, the firm, which is the buy to let lending arm of Nationwide, will also not loan to landlords with less than 20% of a deposit and their minimum criteria is now 25%. The move is the Nationwide’s response to an announcement in March from the Bank of England insisting that buy to let mortgage lenders tighten their lending criteria when offering landlords buy to let mortgages. Industry experts are now forecasting that anyone wanting to invest in property will need a 40% deposit for any potential property investment. The managing director of Mortgages for Business, David Whittaker, said the Nationwide’s move did not come as a surprise and other lenders will follow suit. He explained: “The Mortgage Works is one of the biggest buy to let providers and they have taken the lead and […]