Birmingham Midshires has said it will continue lending to landlords with a maximum of ten mortgaged buy to lets, of which no more than three can be mortgaged with Lloyds Banking Group.
Clients that meet the PRA definition of a portfolio landlord, i.e. those with four or more mortgaged investment properties, will be subject to additional affordability testing from 1st October. Birmingham Midshires has become the latest lender to announce how it will comply with this requirement.
Portfolio landlords will now have to provide full details of their property portfolio when submitting an application, which will then be tested in aggregate using an interest cover ratio of 145% stressed at 5.5%. BM Solutions will also look at how heavily leveraged each portfolio is, requiring that an applicant's total borrowing does not exceed 75% of their portfolio's value.
Additionally, portfolio landlords will be required to earn a minimum of £30,000 in taxable income per application.
These requirements apply only to portfolio landlords, with no changes to the existing process for landlords with three or fewer mortgaged buy to lets.
Head of BM Solutions, Phil Rickards, said:
"Keeping things as simple as possible for brokers is a fundamental part of our continued support for the market as we move through the next major change as an industry.
"Our tailored approach is designed to help brokers continue to write quality business for portfolio landlords, supported by our expert underwriters and top-class service."
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