Barclay’s increases its buy to let mortgage rental cover ratio.
In reaction to the Government’s decision to change buy to let tax relief, Barclays has decided to increase the rental cover ratio it requires.
It is expected that the change in tax relief will increase landlord costs, and so to cover it mortgages Barclays will now ask for 135% rental cover in place of 125%.
The change in criteria will take effect from 07 December. Barclays advises it will not be introducing any other affordability changes. Its affordability rate will remain at 5.79%.
The lender advises that all existing permission-to-let and background buy-to-let mortgages will continue to be assessed at 125%
Any applications that are submitted prior to 07 December will be assessed using the lender’s current 125% criteria.
With news of a stamp duty increase on buy to let purchases, tapering of tax relief and market regulation, the face of buy to let could be changing. Other lenders could soon start to follow suit and amend their criteria.
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