The Mansfield pledges to be ready for portfolio buy-to-let change

Mortgage Introducer

September 11, 2017

The Mansfield Building Society has pledged to be ready for the portfolio buy-to-let change hitting the market in 30 September.

In line with the Prudential Regulation Authority’s requirements portfolio landlords with four or more mortgage properties will have to provide an assets and liabilities statement, together with a detailed schedule of all properties and loans outstanding.

A simplified buy-to-let stressed interest rate will be applied at 5.5%, or 2% above pay rate, whichever is the higher, irrespective of application type or an applicant’s tax status.

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David Newby, mortgage executive, said: “The approach that we’ve taken will fairly consider the individual circumstances of landlords regardless of whether they’re professionals, consumers or simply letting out a property to a close relative.

“The latest criteria changes are being delivered with a high level of support to our intermediary partners.

“This includes the benefit of speaking with our dedicated intermediary support team and also continued access to our experienced underwriting team who adopt an ‘each case on its own merits’ approach to the assessment of all applications.

“We believe the above changes, and the further enhancements we’re about to announce, reaffirm our support for the buy-to-let market and we’re looking forward to sharing more news with you very soon.”

The interest coverage ratio will now be calculated at 125% for business buy-to-let where the applicant is a basic rate tax payer.

For higher/additional rate tax payers, any business buy-to-let purchases, or business buy-to-let remortgage applications with additional borrowing, will continue to be calculated using an ICR of 145% of the monthly mortgage interest payment at the stressed rate.

Danny Belton, head of lender relationships at Legal and General Mortgage Club, said: “Smaller regional building societies, such as The Mansfield have built their reputation on their ability to manually underwrite cases.

“The changes required for buy-to-let portfolio lending will require a more manual approach, and it’s good to see The Mansfield react with these changes.”

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