In response to the forthcoming stamp duty surcharge that comes into effect from 1st April, high street bank, Santander, has announced that it plans to introduce a new two-tiered affordability calculation for its buy to let loans.
As from 21 February 2016, the lender will increase the affordability rate on its buy to let loans over 60% loan to value (LTV) from 5.0% to 5.5%.
The affordability rate for loans up to and including 60% LTV will remain at 5%.
A spokeswoman for Santander said:
“This change reflects our continued prudent approach to lending and affordability and is in line with current market conditions.
“The buy-to-let market is undergoing significant change with the additional three per cent stamp duty on second home purchases from 1st April, and the phased reduction in tax relief starting next year adding to the cost of being a landlord.
As a result, landlords will be reviewing their business models and lenders will also be reviewing their rental cover calculations to ensure affordability assessments keep pace with the change.
“Buy-to-let continues to be a strong market and key priority for us as we look to grow our buy-to-let business.
Our competitive buy-to-let rates combined with our quick time to offer mean that we are well placed to help customers keen to invest in property.”
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8th February 2016