New mortgage rules for buy to let borrowers

The Final Spring Budget
March 10, 2017
Bringing your financial dreams to life
April 19, 2017

New mortgage rules for buy to let borrowers

Our adviser Patrick Goddard explores the new rules introduced by the Prudential Regulation Authority (PRA) in January 2017 which will potentially make obtaining buy to let mortgage finance more difficult.

Buy to let mortgage customers face tougher criteria as lenders adapt to these new regulations.

With additional new rules on lending coming into effect investors may not be able to borrow as much against the total value of a property.

The changes have come about at a time when mortgage interest rates are low hence the affordability assessment factors in future interest rate rises.

How will this effect the borrowers?


Lenders will now be required to use an ‘Income Coverage Ratio’ test (ICR) which looks at the total personal income including any rental income and whether it will meet the mortgage repayments.
If personal income is not to be taken into consideration, then the incoming rent will be required to cover 125% of the outgoings based on a minimum of 5.5% interest rate.
Equity in the property will not be considered in the affordability assessment.
However if a landlord has money in savings this can be used as a measure of income.

What else will change?

Lenders can now allow for a rise in rental income of up to 2% a year when deciding whether a landlord will be able to afford a property.

Terms of less than 5 years or fixed rates of 5 years or more will not be subject to the affordability stress test.

By 30th September 2017 the PRA expect lenders to employ specialist underwriting in respect of ‘Portfolio Landlords’. These measures go beyond the standard requirements in recognition of the more complex nature of this lending.
‘Portfolio Landlords’ are considered to be anyone with more than 4 buy to let properties.


Remortgages which are of the same value will not be affected by the changes and with remortgaging lenders can exclude the arrangement fees, professional fees and administration costs when determining the amount of borrowing.

In Summary

What this all means is that anybody who already owns buy to let property with finance or is thinking about purchasing a buy to let should seek advice with regard to mortgage funding.
In particular those individuals with more than 4 properties should consider their current and future needs and it may be sensible to take advice well before the September deadline.

If you have any questions about getting a buy to let mortgage or if your is coming to the end of its term call the office on 01752 837950.


  1. Hello,I read your blogs named “New mortgage rules for buy to let borrowers – Manning & Company” daily.Your writing style is witty, keep doing what you’re doing! And you can look our website about تحميل اغانى شعبى 2017.

  2. Thanks for every other magnificent article

  3. click here says:

    For most recent information you have to pay a visit the web and on web I found this site as a most excellent web site for newest updates.

  4. Fantastic looking human hair weave Cosy and fashion!!!!

  5. my blog says:

    Your way of describing the whole thing in this paragraph is genuinely fastidious, all can simply know it, Thanks a lot.

  6. click here says:

    I do not even know how I ended up here, but I thought this post was good. I do not know who you are but certainly you’re going to a famous blogger if you aren’t already 😉 Cheers!

  7. home page says:

    Because the admin of this web page is working, no doubt very soon it will be famous, due to its quality contents.

  8. homepage says:

    Excellent post. I was checking continuously this blog and I’m impressed! Very useful information specifically the last part 🙂 I care for such info much. I was seeking this certain information for a long time. Thank you and best of luck.|

  9. mink lashes says:

    This web site truly has all the info I wanted about this subject and didn’t know who to ask.

  10. You’ve made some good points there. I checked on the net for more information about the issue and found most individuals will go along with your views on this web site.

  11. Hi there! Do you know if they make any plugins to safeguard against hackers? I’m kinda paranoid about losing everything I’ve worked hard on. Any tips?

  12. I like the helpful info you provide in your articles. I will bookmark your weblog and check again here regularly. I am quite certain I’ll learn a lot of new stuff right here! Good luck for the next!

  13. my blog says:

    I am not sure where you are getting your info, but great topic. I needs to spend some time learning more or understanding more. Thanks for excellent info I was looking for this information for my mission.

  14. click here says:

    Hey! Do you use Twitter? I’d like to follow you if that would be okay. I’m absolutely enjoying your blog and look forward to new updates.

  15. Somebody essentially lend a hand to make critically articles I would state. That is the first time I frequented your website page and up to now? I amazed with the research you made to make this actual publish amazing. Excellent activity!

  16. home page says:

    I all the time emailed this blog post page to all my associates, for the reason that if like to read it then my links will too.

  17. adult onesie says:

    Hey there! I just wanted to ask if you ever have any problems with hackers? My last blog (wordpress) was hacked and I ended up losing several weeks of hard work due to no data backup. Do you have any methods to stop hackers?

Leave a Reply

Your email address will not be published.