NatWest has made the decision to lend to landlords with up to 10 buy to let investments in their portfolios in the final quarter of 2017.
The move from NatWest will see the limit of investment properties raised from four to 10 as a response to tougher rules from the PRA. The new requirements are accompanied by a buy to let calculator. This is set to be put into action by the lender from the 11th September. More information will also be required on landlords’ experience.
From the 11th September portfolio landlord customers who own at least four buy to let investment properties will be asked by NatWest to provide information on both their buy to let and residential properties. The rental demand and income generated from the properties being let will be assessed by the lender’s valuation service. The results will then be used to validate affordability. By the fourth quarter of 2017 NatWest is set to introduce a revised interest coverage ratio calculation of 5.5 per cent x 135 per cent, reduced from 5.5 per cent x 145 per cent. Rent will have to meet a minimum rental cover calculation of 5.5 per cent x 125 per cent in every case.
Head of intermediary mortgages, Graham Felstead, NatWest Intermediary Solutions, said: ‘The new PRA requirements have given us the opportunity to review our whole approach to the buy to let sector and I am delighted that we will continue to lend to both non-portfolio and portfolio landlords with an enhanced proposition for intermediaries and their customers. With any change comes an element of uncertainty, but by making our intentions clear now and developing our calculator we hope that brokers and their customers can be reassured that they will be able to count on NatWest as one of their key lenders in this market. We will communicate clearly with intermediaries over the coming weeks about what changes they need to make and what we will be doing differently so that we can have a smooth transition come 11 September when these changes are implemented.’