Landbay, a specialist buy-to-let mortgage lender, has announced today that it is revamping its background underlying portfolio stress tests, amended from 125% at 5.5%, to 125% at 5%.
This new rate reflects a more prudent approach to lending to portfolio landlords as part of Landbay’s ongoing commitment to being fully equipped for the recent Prudential Regulation Authority (PRA) underwriting changes. If an application fails the test, dependent on the case, Landbay may consider applications using up to 10% of the declared income, subject to a minimum personal income of £100,000.
This is the latest in a series of updates to Landbay’s credit policy, helping mortgage brokers and their customers access the specialist solutions that they need.
Last week, the lender announced that it has extended its lending criteria to now include first time landlords who do not currently own a residential property, designed to help professional people who are renting to invest in property themselves and get a foot onto the housing ladder.
Paul Brett, the Managing Director of Intermediaries at Landbay, comments on its latest announcement: “The buy-to-let market is set to become more complex in 2018 and, as landlords move to navigate the changing environment, so too must lenders ensure that their approach to lending is robust. This is why we have chosen to refine our underlying portfolio stress tests, demonstrating our ongoing commitment to portfolio landlords.”
At the same time, Together has launched its lowest monthly bridging rate for short-term finance, of 0.49% for the first six months, to support property investors and landlords buying at auction.
The specialist lender has launched the new rate to help investors renovate newly purchased residential properties, both for resale or buy-to-let, including auction purchases.
Customers will be offered the new lower rate for the first six months when they take out a 12-month bridging loan of between £30,000-£250,000, at up to 75% loan-to-value (LTV), and up to £500,000 at up to 70% LTV, to buy a residential property of standard construction.
Chris Baguley, the Commercial Director of Together, says: “This is our lowest ever rate for short-term finance, and has been specifically designed to help customers make the most of their residential property purchases.
“The initial lower rate will cut customers’ monthly payments for the first six months of the loan term. This will improve cash flow and free up their money for renovations, before resale or letting to tenants. We anticipate it will be popular with a range of customers, including auction buyers, buy-to-let investors and portfolio landlords.”