Buy to Let
Barclays allows landlords to use own income in buy-to-let applications
Landlords will be allowed to use personal income when submitting an application to Barclays to bolster any shortfall in rent on buy-to-let applications to improve the chances of receiving a mortgage.
After carrying out a pilot, the lender has decided to allow the applicant’s disposable income to be used to bolster the rental calculation.
Under the new approach, customers would be required to complete a full income and expenditure assessment. Landlords would need to disclose; net income, commitments and dependents, residential mortgages including permission to let properties and the total of all buy-to-let mortgages outstanding and rents received.
Disposable income cannot be used if the term of the mortgage takes the applicant into retirement.
Andy Gray, Barclays’ managing director of mortgages, said: “There are only a handful lenders that allow any shortfall in the rental income used to calculate affordability to be met by the applicant’s disposable income.
“Barclays’ new policy provides a greater opportunity for those planning for their financial future and choosing to invest in rental properties to help support their longer-term goals of, for example, paying for their childrens’ university fees or enhancing their lifestyle in retirement.”
This is the second major policy change inside a week which the lender has announced.
After applying a loan-to-income cap of four-and-a-half times income on applications over 80% loan-to-value (LTV) at the start of the year the lender extended this to cover all mortgages last week.