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Anger as buy to let stress tests make borrowing almost impossible

There’s been widespread anger from the mortgage broker community in response to NatWest’s decision to make buy to let stress tests much tougher for borrowers.

A statement yesterday morning read: "Effective Tuesday 13th June, we’re changing our Buy to Let stress rates as follows within our Decision in Principle (DIP) and Full Mortgage Application (FMA).”

In details this means that for a two-year fixed rate morning the stress rate was increased from 6.7 per cent to 8.10 per cent. For a five year fixed the rate went from 6.0 per cent to 6.89 per cent. The like-for-like remortgage stress rate has now gone from 6.0 per cent to 7.54 per cent.


In response Jamie Lennox, a director at Dimora Mortgages, says: “These changes show very clearly that NatWest has a minimal appetite for the buy to let mortgage market at present. With higher stress testing, it will rule out a large number of landlords being able to access them as a lender. The question is, will there be other lenders who follow in their footsteps? If they do, we will see a mass sell-off from landlords who are struggling to obtain new mortgage deals.”

Riz Malik of R3 Mortgages adds: “I do not see Natwest's share of the buy-to-let market increasing at these stress test levels. However, I am not sure how much of a buy to let market will be left if things continue at this rate.”

Graham Cox of SelfEmployedMortgageHub believes this move is a pre-emptive strike ahead of an expected further Bank of England base rate rise. He comments: “Fortunately, there are other lenders with far less onerous stress tests, well below 6.0 per cent, though that could change at any time given the current market volatility.”

Anil Mistry, a mortgage broker at RNR Mortgage Solutions, states: “It's increasingly apparent that NatWest has effectively curtailed its support for the buy to let sector, indicating a shift in focus towards its residential offerings. It also appears that the bank aims to ensure that service standards remain unaffected in the future.”

And a final comment, from Gareth Davies of South Coast Mortgage Services, puts it this way: “It would be much better to tell us all that they simply aren't interested in buy to let right now.”

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    We know its a conspiracy at the highest level by Government, Banks & Institution’s to get rid of buy 2 let Private landlords.
    The Big Boys wants the Business that’s clear enough just how many of those guys have jumping in that was never involved before.
    High Rise Flats / Semi Modular Units, order of the day to Concrete Mixer cannot stop.
    So we have been attacked from every angle by Regulation, Requirements and costs of all sorts added, that very often don’t apply to others.
    Stress Test they hit the jackpot this time the last straw removal of your finance they have your Key.
    There is no mention of the people’s Stress the human Stress the real Stress that’s some test.

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    This simply reinforces that rents need to give a yield of over 8 % for the prs to be viable and should send powerful message to politicians about what a great deal many tenants are getting compared to mortgage payers.


    Politicians will simply pander to the loudest minority voice and/or their corporate masters. They don’t have the moral sense nor motivation to see the ‘facts’.

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    Stress test is worst case scenario, so the banks obviously think that interest rates could “possibly” rise to 8%. I don’t think this is a bad decision given where interest rates are now. Yes, it’s a pain but this all stems from inflation and interest rates rising because of it. What I have issue with is commercial lending where they still want a 5-7% margin over base rate plus fees which puts borrowing in excess of 10%. The banks increased their margins when interest rates were stupidly low, cashing in on the situation because they knew businesses would pay 5% for their cash flow. Now interest rates are rising again, the banks are not reacting to it quick enough by adjusting their profit margin, so businesses are putting up prices to cover increases in wages, materials and finance, and consequently causing inflation. Wouldn’t it be in the banks best interest to reduce their margin to help stop inflation?


    The current high interest rates and big margins help grow the banks' profits, aided and abetted by the Bank of England boss, a big banker ( or something like that) himself.

    Huge jumps in fixed rate mortgages crucify those who need to remortgage but leave other mortgage borrowers unaffected. I don't understand how something that only affects a small proportion of the economically active population can be used to control inflation but do understand how it helps cronies in the lending sectors.

    Meanwhile benefit claimants have had a 10.1% uplift in their taxpayer funded benefits whilst enjoying real term rent reductions in both the PRS and social rental sectors.

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    I am starting to believe that there is something on the cards to get rid of the whole PRS, maybe the banks think a Labour government will do what the SNP did, freeze rents and slap an evictions ban 😲😲 if that happens and a landlords mortgage keeps going up 🆘🆘 the banks security is at risk with the landlord defaulting in a falling market !

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    Natwest has always been a halfhearted supporter of b2let. This just gives them an excuse. Interesting the B of E claims inflation is not falling but both fuel and energy prices have gone down. All seems a bit suspect. Maybe NatWest are not the only ones using inflation as a tool to manipulate the situation.


    I think we are in catch up stage, fuel has gone down but nothing else has yet. Let’s hope we don’t see monopolies cashing in!

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    Andrew, you are right Nat West have never been too happy to support BTL loans. It has always been for a term of 2 to 5 years, same as fixed rate. It is best not to borrow from them. There are still some other lenders who can lend. The LL's need to try and reduce the capital, if they are on interest only mortgagees. But now with high interest rates it is going to be tough to pay off much capital on the outstanding mortgages, low gearing is the answer. Difficult in this market to borrow 75% of the LTV.


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