The buy to let rental coverage ratio has been increased to 145% on a reference rate of 5.5%. Previously this was 125% on a reference rate of 5%. The maximum number of investment buy to let properties that Newcastle Intermediaries will lend on mortgaged properties has been reduced to three (from five). This doesn’t include mortgage-free buy to let properties.
Full details can be found in the lending criteria section of the Newcastle Intermediaries website.
The changes reflect the forthcoming changes to tax relief that will affect individual buy to let investors from 1st April 2017 and also the requirement to ensure that all costs associated with a rental property are fully accounted for.
Steve Carruthers, head of mortgage distribution, stated: “As a responsible lender we are keen to ensure that customers are well positioned to deal with these changes in advance.”
Brokers have until 31 May to submit any applications previously agreed prior to this date under the old policy. Any buy to let applications currently being processed will continue to be assessed under the old policy.
