Hinckley & Rugby announce new rules on BTL lending

Hinckley & Rugby announce new rules on BTL lending

Hinckley & Rugby Building Society has announced its new lending policy for Buy to Let mortgages for the New Year.

The changes centre on the rental stress tests for investor mortgages, to comply with the new requirements from the Prudential Regulatory Authority which apply from January 1 2017.

Applications received from New Year’s Day will be stressed at a higher rate, initially 5.5%, with a coverage requirement of 145%. This compares to the existing current requirement of 135 per cent at pay rate plus 2.0%.

One exception to this is Hinckley & Rugby’s five-year fixed rate products, which have a requirement of 145% coverage at pay rate (currently 2.75% at 60% LTV) rather than the stressed rate.

The Society will, however, continue to consider applications which don't meet these thresholds by taking into account personal income to cover the rental shortfall. The ICR (interest coverage ratio) would then be an absolute minimum of 145% at pay rate, and an affordability assessment would consider verified income and expenditure.

Carolyn Thornley-Yates, Hinckley & Rugby head of intermediary sales, had this to say: “At Hinckley & Rugby we recognise that good quality buy to let applications aren’t defined solely by the amount of rental income generated, and that there are instances where the personal ability of the borrower is more than sufficient to support a small portion of the loan, now and in the future.

Our manual approach to underwriting allows us to consider individual situations in depth, making prudent lending decisions tailored to the borrower’s needs and circumstances”.

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Latest Comments

SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

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Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

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Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

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paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

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CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

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warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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