Kent Reliance has launched an income backed buy-to-let proposition for limited companies and individual lending, taking a broader view of customer affordability.
This is done by using earned income to supplement the interest coverage ratio (ICR) for buy-to-let loans, where the rental property yield in itself does not meet minimum requirements.
Adrian Moloney, sales director, OneSavings Bank, said: “This new, broader approach to buy-to-let affordability will provide additional flexibility to allow earned income to form part of the affordability assessment for a buy-to-let application.
“High property values, particularly within London and the South East, can result in lower yields and as a result, some applicants may be refused lending, even on good quality properties. We’re looking to fix that.”
“To support this product, we’ve also updated our Buy to Let calculator so brokers can immediately see if a case fits the income backed criteria prior to submission, thereby simplifying the process and enabling a faster turnaround.”
The proposition is specifically tailored for non-portfolio landlords looking to borrow through a limited company arrangement or on an individual basis.
It is supported with an online calculator to assess and confirm eligibility, particularly useful for high earing individuals with low residential leverage and high yielding individual or limited company or non-portfolio landlords, where the subject property is low yielding.
Ying Tan, managing director, Buy to Let Club, added: “Kent Reliance has always excelled at recognising the needs of brokers and this latest initiative is evidence of that.
“The lending landscape has changed considerably as a result of the new rules on affordability and landlords in areas with high property prices especially are feeling the impact.
“By taking into account an investor’s other incomes to support their application, Kent Reliance is helping landlords to navigate the market challenges and I’m sure this move will be widely welcomed.”
Andrew Montlake, director, Coreco, said: “It is great to see a specialist lender such as Kent Reliance continue to work hard with brokers to understand and meet consumer’s needs.
“There are a whole host of buy-to-let landlords who invest in property for long-term growth who have spare income to make up for lower rental yields, and more choice of lenders who top-slice is needed in the market.”
“Lenders need to continue to innovate and evolve their offerings to meet ever-changing circumstances and Kent Reliance has a great track record of doing this.”