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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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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