Natwest has lowered its buy-to-let income coverage ratio requirement from 145% to 135% at 5.5%, while it has also introduced more stringent portfolio buy-to-let requirements to satisfy the Bank of England’s Prudential Regulation Authority rules for landlords with four or more mortgaged properties, which came into play over the weekend.
The change means that, for the first time, lenders will need to undertake a full analysis of a landlord’s entire property portfolio as part of the lending process, and at NatWest, the rule will apply to landlords with four rented properties, even if they are not all mortgaged.
Currently the maximum number of rented properties a landlord can own with NatWest is four, but the lender plans to increase the number of rented homes a landlord customer can own up to 10, including unencumbered properties and properties mortgaged with another lender, while it will also up the maximum aggregated customer borrowing allowed from £2m to £3.5m.
What’s more, the existing £50,000 minimum income for aggregated borrowing over £1m will be removed and all customers will be required to meet the standard buy-to-let minimum income of £25,000.
Graham Felstead, head of intermediary mortgages, NatWest Intermediary Solutions, commented: “The great progress we have made with our systems has enabled us to introduce the revised ICR ahead of our original schedule.”
He added: “I am pleased to confirm that we are ready to implement the new PRA requirements.
“Our commitment to continue supporting portfolio landlords is evidenced by the further changes we are introducing later this year.”