Given the increased scrutiny landlords have to go through when applying for a new or renewal buy-to-let mortgage, Kent Reliance’s new income-backed product for limited companies and individual borrowers could prove a godsend.
The specialist mortgage provider has announced the new product, which it says will now take a broader view of customer affordability when the rental property yield on its own does not meet minimum requirements.
Using earned income to supplement the interest coverage ratio (ICR) for buy-to-let loans, this could be the first of many such offerings as competition for buy-to-let lending is still intense among mortgage lenders.
The product, says Kent, has been specifically tailored for non-portfolio landlords looking to borrow through a limited company arrangement or on an individual basis.
Adrian Moloney, sales director for One Savings Bank, which Kent Reliance is a part of, says:
“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 are looking to fix that.
“To support this product, we have 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.”
Andrew Montlake, director of London-based broker Coreco, said it was 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.”