Barclays simplifies BTL affordability assessments

Barclays Mortgages is simplifying its affordability assessments and minimum gross income requirements for new buy-to-let lending.

Related topics:  Mortgages
Rozi Jones
14th December 2016
Barclays branch

Barclays says it will no longer need a separate rental coverage ratio test as it already complies with the PRA's new minimum underwriting requirements which come into force on 1 January 2017.

From today, Barclays is removing its separate rental coverage requirement and simplifying the minimum gross income requirement to £25,000 per annum for joint applications (with at least one applicant earning £25,000).

Barclays already considers both personal and rental income within the affordability calculation and undertakes a full affordability assessment of the landlord.

Its current income affordability test includes all relevant landlord costs, such as those associated with renting out BTL properties, applicant level tax liability (including mortgage interest tax relief changes being phased in from April 2017) and assumes a minimum borrower interest rate of 5.5% for existing and applied for BTLs.

All applications submitted from 14 December will be assessed using these new criteria. Full application submissions received before this date will continue to be assessed under previous criteria.

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