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How we are helping landlords maximise their borrowing potential

In the last 12 months, up to December 2022, private renters have been faced with average rental increase of 4.1%. Has this been one of the unintended consequences of the Prudential Regulation Authority’s (PRA) underwriting standards being stricter around evidencing affordability?

Many individuals have the capacity to afford the mortgage but struggle to meet the lender’s interest coverage ratio (ICR). With everyday costs increasing, and Buy-to-Let (BTL) mortgage rates remaining high, more and more landlords are facing a dilemma of how much rent they can feasibly market their property for.

The Office for National Statistics – Index of Private Housing Rental Prices, published data detailing the annual UK private rental price percentage change by English region, showing that prices in the East Midlands saw the highest percentage increase of 5.0%. With the North East and South East having the smallest increase of 3.8%. Although the East Midlands had the highest increase, the average gross monthly rental payment sits around £832 per month which is likely to be more manageable when compared to other areas of the country.

This situation is understandably a cause for concern for many landlords across the country and without support from lenders, we could see many landlords opting to either sell up or significantly increase the rent for tenants who are likely struggling with other costs across their utilities and essentials.

How we are helping

To help combat this issue we have extended our competitive BTL range and introduced a Top-slicing option. Top-slicing allows landlords to maximise their borrowing potential and give themselves the best possible chance of securing the mortgage they need without having to significantly increase rental payments to meet affordability criteria. Top-slicing allows us to consider your clients’ personal income to support any potential rental shortfalls.

With this option applied, we have the flexibility to assess any rental shortfalls on your clients’ personal income and affordability. We review every case manually and take your clients’ individual circumstances into account.

Still not sure if your case fits? To discuss your case with a member of our Intermediary team, call us on 01455 894 084 and have your call answered within four seconds on average!

Click here to read more about our Top-slicing criteria, including how we calculate whether or not a mortgage is self-supporting.

Click here to browse our range of BTL products.

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Any questions?

Our responsive and helpful team are always on hand to help if you have any questions. 

You can call us on 01455 874 084 or leave us a live chat message below and we will get back to you as soon as possible.