Lenders update commercial, buy to let and residential mortgage offerings

Barclays updates its affordability assessments and minimum gross income for buy to let lending, while Accord launches a new range of off-set mortgages and revises its buy to let rental calculation. Shawbrook also makes revisions to its product range, reducing the rates on its commercial and buy to let mortgages.

In order to comply with the Prudential Regulation Authority’s minimum underwriting requirements, which will come into play on 1st January 2017, Barclays has revised its affordability assessments and minimum gross income criteria for new buy to let lending.

By removing its separate rental coverage requirement, Barclays is implementing a gross income requirement of £25,000 per annum for joint applications, where one applicant, at least, must be earning £25,000.

The new criteria will be effective as from 14 December.

Intermediary only lender, Accord Mortgages, has launched a new range of five-year offset mortgages.

The new range covers a variety of options for house purchase and remortgage, including a 2.47% offset deal at 75% loan to value (LTV), a 2.59% deal at 80% LTV and a 2.69% deal at 85% LTV. All carry a product fee of £995.

David Robson, National Intermediary Sales Manager at Accord said:

“The demand for offset mortgages is increasing, especially as savings rates are offering such low returns.

“Offsets can be a great option for all types of borrowers, particularly those with a large amount of savings and people with irregular incomes or who benefit from bonuses. Higher and additional tax payers can also benefit from an offset, as they will avoid paying tax on interest earned on their savings."

Accord, which is part of the Yorkshire Building Society Group, is also up-dating its buy to let rental calculations.

As from 5pm on Thursday 15th December the new calculations will be 135% at 5.50% for two to three year products and 135% at 5.00% for five-year products.

The LTV of an application will not affect the above calculation and for background buy to let mortgages Accord still requires 125% rental coverage on the portfolio.

Any decisions in principle submitted by 5pm on the 15th will be reviewed using the present stress test of 125%.

The Commercial Mortgages team of Shawbrook Bank will be introducing new pricing as from 19th December 2015.

Reduced rates of up to 1.06% on commercial products and up to 0.96% on specialist buy to let products will be available as part of the lender’s efforts to simplify its proposition.

The lender is also introducing three LTV tiers that will be consistent across all specialist buy to let and commercial products.

In addition, Shawbrook Bank is revising its affordability criteria, with the introduction of separate coverage ratios for individual and corporate borrowers.

Karen Bennett, Managing Director of Shawbrook Commercial Mortgages said:

“We are confident that these rate reductions provide a timely boost to brokers and their clients and, whilst the buy to let market faces headwinds in 2017, we look forward to continuing to support our partners with a considered and sustainable lending approach.”


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