Leeds unveils portfolio buy-to-let plans

Ryan Bembridge

August 7, 2017

Leeds Building Society has revealed how it plans to offer mortgages for portfolio buy-to-let landlords come September 30.

Landlords with four or more buy-to-lets will need to provide details of assets and liabilities and declare future investment property intentions. Further information such as cashflow will be requested only in more complex cases.

The lender will increase its maximum portfolio size from eight to 10 as well as the maximum number of holiday lets permitted to a third (33%).

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However the society won’t alter its core criteria of loan-to-value, maximum loan size, interest coverage ratio and stress tests.

Jaedon Green, Leeds Building Society’s director of product and distribution, said: “We’re committed to supporting landlords and the buy-to-let market so will continue to accept mortgage applications from portfolio landlords after 30 September.

“We’ve also increased the maximum number of Holiday Lets by 33%, which provides intermediaries with greater flexibility to mix and match, using the Leeds Building Society for up to four properties, whether Buy to Let, Holiday Let or a mixture.

“And by lifting the maximum portfolio size from eight to 10 mortgaged rental properties, we’re recognising the growth in portfolio Buy to Let as the market matures.

“We’re working very hard to make our buy-to-let proposition simple and straightforward and ensure our service is as broker-friendly as possible.”

The society made changes to its buy-to-let criteria in January.

It increased its income coverage ratio for buy-to-let and holiday let mortgages from 125% to 140%, it started stress testing at 5.50% for purchase and capital raising re-mortgages and at 5.00% where there is no additional borrowing, while it also started taking mortgage interest tax relief into account when assessing income.

The society also removed the minimum income requirement (previously £25,000 pa or £40,000 for joint applicants) and removed the need for an income coverage ratio assessment for existing Leeds customers at the end of their existing deal, provided there is no additional borrowing.

Green added: “The buy-to-let criteria changes we introduced at the start of this year, were well-received by the industry.

“To further develop our proposition we’re preparing our underwriting and broker-facing colleagues to ensure that at launch we‘re able to fully support our intermediary partners.”

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