Another major Buy To Let lender tightens portfolio landlord rules

Leeds Building Society is the latest major lender to reveal changes to buy to let lending ahead of new rules coming into force next month.

In line with new Prudential Regulation Authority rules, the Leeds will define a portfolio landlord as a borrower who has four or more mortgaged rental properties.

“We’re committed to supporting landlords and the Buy to Let market so will continue to accept mortgage applications from portfolio landlords after September 30” says Jaedon Green, the society’s director of product and distribution.

“By lifting the maximum portfolio size from eight to 10 mortgaged rental properties, we’re recognising the growth in portfolio buy to let as the market matures. There will be no changes to our existing loan to value limits, maximum loan size, interest coverage ratio or stress rates” he says.

The Society made changes to its BTL criteria in January, including increasing interest coverage ratio for BTL mortgages from 125 per cent to 140 per cent, plus additional stress tests for purchases and remortgaging. 

The society says its underwriting approach will continue to be proportionate to the complexity of each case.

In addition to the property schedule already requested for BTL applications, on or after September 29 portfolio landlords will need to provide details of their assets and liabilities, and declare future investment property intentions.

Further information, such as cash flow, will be requested only in more complex cases, which the society expects will account for a very small proportion of applications.