Landlords Beware - more changes are underway….
It’s been a tough few months for Buy to Let (BTL) landlords with various tax changes being
introduced by the Government to slow down the BTL market and help more first time buyers
enter the property market.
As a result of these changes, and potential impact on the profitability of investment property,
the mortgage market is now starting to respond and seeking mortgage advice is ever more
paramount. Over the last few months, we have seen many lenders increase their rental
assessment calculation by small amounts resulting in it being more difficult to obtain higher
loan to values as the rental affordability is not able to sustain the level of borrowing.
This week the market has moved again. The Mortgage Works, the BTL lending arm of the
Nationwide, and one of the largest lenders in the UK, increased their rental coverage
requirement from 125% to 145% - a huge increase and one which it is expected will be
followed by other lenders. In addition, they increased their minimum deposit level from 20% to
So what does this mean for Buy to Let investors…….in simple terms, higher yields will be
needed to match existing borrowing. Bigger deposits will also be needed going forward as the
higher rental calculations will mean higher rents will be required to achieve the same
With all of this in mind, and on the basis that other lenders are likely to follow suit shortly, why
not contact us now to see if we can provide advice to help with your portfolio before the rest of
the mortgage market catches up.
Paul Hardingham and Tony Ibson are Mortgage and Protection Advisers at Innovate
Mortgages and Loans. Both have over 20 years of experience advising individuals and
businesses across the North East of England. They can be contacted for bespoke advice at
firstname.lastname@example.org or email@example.com or call 0191 223 3514.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured
Registered Address 95 High Street, Gosforth, Newcastle upon Tyne. NE3 4AA.
Tel: 0191 2233514 Email: firstname.lastname@example.org Web: www.innovateml.co.uk
Innovation Financial Management Ltd trading as Innovate Mortgages and Loans is authorised and regulated by the Financial Conduct Authority. Registered in England, Registered No. 04383252.