Vida Homeloans has strengthened its buy-to-let proposition following the instruction of new underwriting standards by the Prudential Regulatory Authority.
Vida Homeloans’ rental cover is 125% for basic rate UK tax payers and lmited companies and 140% for higher rate UK tax payers.
Other affordability criteria include HMOs from 130% rental cover and 5 year fixed rate being based on product rate.
This announcement follows the government’s Housing White Paper set out last week which set out legislation to improve conditions in the private rental sector for both landlords and tenants.
Louisa Sedgwick, director of sales, mortgages, at Vida Homeloans, said: “Our buy-to-let proposition is designed to give flexibility to landlords and demonstrates our appetite to advance mortgages to landlords who want to offer longer tenancies.
“We have had great feedback from intermediaries and distribution partners about our willingness to consider 20% top ups from surplus income, which could mean that a higher rate taxpayer can obtain a buy to let mortgage based on 120% of rental income.
“Coupled with a notional rate of 5% on pound for pound remortgages, you can see how we are using interest coverage ratios which are tailored to the individual client’s financial status.”