Skipton unveils portfolio buy-to-let plans

Ryan Bembridge

August 15, 2017

Skipton will affordability stress test ‘portfolio’ landlords with an income coverage ratio of 150% and a minimum income requirement of £45,000.

Landlords with four buy-to-lets will be stress tested against an income coverage ratio of 150% at 5.5%, or at 5% for 5-year fixed rates.

Money from rental properties can be used as income if there is supporting evidence.

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The changes are set to be made ahead of the Prudential Regulation Authority’s 30 September deadline but Skipton wouldn’t give any specifics.

Paul Darwin, Skipton’s director of intermediary lending, said: “Whilst being mindful of these new rules, this is very much business as usual for us.

“We have a great deal of knowledge and experience in this area of lending, and this is more a case of aligning our existing BTL portfolio proposition with the new requirements than anything else.

“Skipton has been active in the buy-to-let market for many years and we recognise the amount of changes landlords have had to manage; from changes to income tax, stamp duty, affordability, underwriting, not to mention the new EPC changes for landlords from spring next year.

“We know how important it is for our broker partners and landlords to have all the support they can from us. As a result, we’ll be rolling out our new underwriting requirements shortly to enable brokers to test drive and become familiar with everything in their own time.”

Much of Skipton’s existing criteria will remain the same, such as landlords having up to 10 properties in total and five properties mortgaged with Skipton.

The society will share more details of revised documentation requirements such as business plans next month.

The PRA changes will mean firms must scrutinise borrowers with four or more buy-to-lets by assessing their full portfolio of properties and outstanding mortgages in addition to the standard assessment.

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