Coventry Building Society increases rental requirement
Coventry Building Society has become the latest lender to raise the rental income requirement on their Buy-to-Let mortgages. As of this week their calculation has increased from 125% coverage to 140%.
This follows a string of lenders who have reviewed their policies in response to a Bank of England consultation earlier this year. The regulator has put a focus on affordability and stress testing to ensure that Buy to Let mortgages remain sustainable, even if costs rise.
Lenders including Coventry, The Mortgage Works and Barclays have already taken action, changing their criteria to account for future increases in costs and the potential for lower profitability.
Clearly property investors need to be aware of the increasing costs, including changes to tax relief, over the coming years and take account of this when planning any future purchases.
The good news is that Buy-to-let rates are currently very low, so now is a good time to review any existing mortgages and look at cutting outgoings now.
Guild Mortgage Service, Provided by London & Country Mortgages