Buy to Let

Lloyds changes landlord criteria

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BM Solutions, the buy-to-let arm of Lloyds Banking Group, has ditched the need for landlords to have non-rental income of at least

The lender does expect landlords applying for its buy-to-let mortgages to have some income, but, as of today, does not specify a minimum requirement.

Instead, in order to make sure landlords can afford their repayments, it asks that the rent equals at least 125% of the monthly mortgage repayments, calculated at new rates of interest.

A spokesperson said: “Our move to take away the minimum income requirement acknowledges that as buy-to-let affordability is based on rental income, rather than personal income, we can make it more accessible to more landlords. They will now simply need to include income details on their application.

“At the same time, we are updating our buy-to-let affordability criteria. This remains at 125% of rental income, but at the higher of either the initial pay rate or a notional rate which is currently 5%. We believe that this is the right thing to do to ensure borrowers are in the best possible position to be able to manage future payments if their circumstances change.”