TMW (The Mortgage Works) will introduce its new criteria for buy to let portfolio lending this week.
TMW are the specialist buy to let arm of the Nationwide Building Society, and one of the largest buy to let lenders in the UK.
They follow many of the other major lenders in announcing their new portfolio lending criteria for landlords in response to the new mortgage underwriting standards due at the end of September.
Portfolio lending will be defined as a borrower with four or more distinct mortgaged buy to let rental properties.
For portfolio cases the ICR will be 145 per cent, with HMOs remaining at 170 per cent, regardless of a landlord’s tax status.
In addition, for portfolios of ten properties or fewer, the aggregate stress rate for all properties will be 4.5 per cent, while for 11 or more properties, or where the total borrowing with the Nationwide Group is greater than £1million, the aggregate stress rate will be 5.50 per cent.
All portfolio landlord applications will require a property schedule, with additional questions asked at the Decision in Principle stage to identify portfolio landlords, including the number of properties in a landlord’s portfolio.
If the customer has or will have four or more mortgaged properties, there may be additional questions about the value, rental income and outstanding mortgage balances secured against the whole portfolio. More complex cases may require further information such as a business plan.
Like-for-like remortgage applications will be excluded from portfolios of fewer than seven properties and will not be subject to portfolio landlord criteria. There will be no changes to LTV limits, maximum loan size or minimum income criteria. TMW will continue to accept portfolios of all sizes, with no limit to the number of properties.
Managing Director of TMW, Paul Wootton, said: ‘We have taken a pragmatic and considered approach to the introduction of the new PRA standards, drawing on our long experience in the portfolio sector. We have invested in a new online system and a dedicated portfolio team to support the process, as well as offering clear and ongoing guidance to both landlords and brokers from an early stage to help them prepare for the new rules, amid a range of changes affecting the buy to let sector. The aim is that for many landlords and brokers it will be business as usual.’