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Buy to Let criteria changes at Leeds Building Society.

08 December 2016


Leeds Building Society have responded to the PRAs supervisory statement on underwriting standards for Buy to Let (BTL) properties by changing their criteria on BTL mortgages.

They have assessed their income coverage ratio (ICR) taking into account mortgage interest tax relief. As of 1January 2017 they have increased their ICR for BTL mortgages from 125% to 140%.

Their affordability stress test rate will be 5.50% for purchase and remortgage applications where there is additional borrowing.

Where the applicant is remortgaging and there is no additional borrowing, their affordability stress test rate is reduced to 5.00%.

For BTL their previous minimum income requirement of £25,000pa (or £40,000pa for joint applicants) will be removed meaning no minimum income requirement. However, there remains a requirement for the applicant to evidence an income.

In addition, They are reducing the documentation requirements for BTL applications, with applicants now only required to provide their last monthly bank statement and proof of income*.

BTL mortgages are still available up to 70% LTV.

Where existing Leeds Building Society BTL customers come to an end of their existing deal and wish to take a new product with the Society, an ICR assessment is not required where there is no additional borrowing.

In terms of their Holiday Let proposition, as of 1January 2017 they have increased their ICR from 125% to 140% and changed their affordability stress test rate to 5.50%, all other Holiday Let criteria remains unchanged.

For more information on their Buy to Let proposition contact your local Business Development Manager, you can find their contact details here. While you’re at it why not follow them on Twitter or join their LinkedIn® professional networking services group.

*Income verification; Employed – latest month or 4 weekly payslips; Self Employed – An accountants certificate, last year’s full accounts or last year’s SA302 and tax year overview.

This information is for use by FCA authorised intermediaries only and must not be distributed to potential borrowers.

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