Newcastle Building Society becomes the latest in a raft of lenders to tighten its buy to let criteria following the government’s decision to reduce buy to let mortgage tax relief.
As from 24 May, Newcastle Building Society is to increase its rental coverage ratio from 125% to 145%.
It has also increased its stress rate from 5% to 5.5% and has reduced the maximum number of properties that it will lend on, in a single portfolio, from five down to three.
Brokers will have until 31 May to submit applications that were agreed under the previous terms.
Steve Carruthers, head of distribution, Newcastle Building Society, said:
“As a responsible lender we are keen to ensure that customers are well positioned to deal with these changes in advance.”
The government changes to the amount of tax relief that landlords can claim on their mortgages will come into effect gradually, starting from April 2017.
Newcastle Building Society follows Barclays, Foundation Home Loans, Keystone and The Mortgage Works, who have also recently increased their rental coverage ratio for individual borrowers in response to the upcoming cuts to tax relief.
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24th May 2016