Recent changes to Buy to Let mortgage affordability criteria are having a big impact on landlords. However, there are still some great opportunities, and more options to securing the lending required than investors may be aware of.
For many looking to invest in Buy to Let properties, new mortgage stress testing rules laid out by the PRA (Prudential Regulatory Authority – responsible for some aspects of the regulation of banks and lenders), have made the prospect of taking out a mortgage seem very challenging. For some investors, a mortgage may seem out of reach with rental calculations now sitting at 145%. This has affected those in the southeast, in particular, where rental yields are lower.
Top slicing is an option which allows the borrower to use surplus income to ‘top up’ any shortfall in the rental income.
However, there are more potential avenues than borrowers may realise to securing a Buy to Let mortgage. Top slicing is an option which allows the borrower to use surplus income to ‘top up’ any shortfall in the rental income, helping the borrower meet the lender’s affordability criteria.
Although many lenders do not offer this, we have access to lenders who will: taking a more pragmatic approach to lending as opposed to seeing each case in black and white.
With lenders competing fiercely on criteria, as well as rates, million-plus lending is getting cheaper.
Tom Foster, Mortgage Manager at largemortgageloans.com, comments that:
“The mortgage market is an ever changing, ever evolving arena. This constant change has forced us, as well as lenders, to find innovative new lending solutions for clients. Top slicing is a realistic and logical approach to lending, and it is good to see it prevailing.”
You can read more about how to get a high value mortgage here.
What should I do next?
It’s always a good idea to talk to an adviser when considering different borrowing options. If you are a Buy to Let investor who is finding it a challenge to meet the new stricter lending criteria and would like to find out if top slicing is something that could help you, talk to one of our specialist Mortgage Managers.
You can read how we secured a bespoke £7.32 million Buy to Let Portfolio remortgage here.
YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT