The Skipton Building Society has announced two key changes to its existing buy-to-let lending criteria ahead of new Prudential Regulation Authority (PRA) rules coming into force from 30 September.
These new rules mean portfolio landlords will be assessed differently from non-portfolio landlords.
For portfolio buy-to-let lending, Skipton has revised its affordability requirements to 150% at 5.5%, (and at 5% for five year fixed rates) against its standard affordability of 145% at 5.5%. Landlords in the portfolio category will require a minimum income of at least £45,000 – but income from rental properties can be included with supporting evidence.
A large swathe of existing criteria will remain the same; this includes no change to landlords having up to 10 properties in total, and no change to having up to five properties mortgaged with Skipton. The Society will share full details of revised documentation requirements such as business plans next month.
Paul Darwin, Skipton’s director of intermediary lending, said: “Whilst being mindful of these new rules, this is very much business as usual for us. We have a great deal of knowledge and experience in this area of lending, and this is more a case of aligning our existing buy-to-let portfolio proposition with the new requirements than anything else. We want to make sure brokers and portfolio landlords have all the information they need prior to 30th September– together with the support from us – to help navigate through this new landscape.
“Skipton has been active in the buy-to-let market for many years and we recognise the amount of changes landlords have had to manage; from changes to income tax, stamp duty, affordability, underwriting, not to mention the new EPC changes for landlords from spring next year. We know how important it is for our broker partners and landlords to have all the support they can from us. As a result, we’ll be rolling out our new underwriting requirements shortly to enable brokers to test drive and become familiar with everything in their own time.”