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  • Mortgages & Finance

    Barclays new approach to mortgage affordability

    "Barclays has announced a new approach to calculating mortgage affordability that will act as a boost for many buy-to-let landlords.

    Following a successful pilot conducted last year, Barclays will now allow any shortfall in the rental income used to calculate affordability to be met by the applicant’s disposable income.

    Under the new approach, customers would be required to complete a full income and expenditure assessment involving disclosure of the following:

    Net Income
    Commitments and dependents
    All residential mortgages (including permissions-to-lets)
    The total of all BTL mortgages outstanding and the total rent received
    The application does not go into retirement and there are no foreseeable changes to their income
    The new policy will help individuals looking to realise their goal of supplementing their income or enhancing their capital growth plans by investing in a rental property."

    Source: Choices Today 28/01/15
    http://choicestoday.choices.co.uk/news_f...ordability

    Or, to put it another way, borrowers will be allowed to subsidise their own tenants' rent, presumably in the interests (pun intended) of pursuing capital appreciation, although the article does say "...The new policy will help individuals looking to realise their goal of supplementing their income...". Extraordinary!
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    I think very few people will meet this criteria.

    Woolwich were one of very few lenders who had a lower rental calc than most then they raised it. I suspect they lost a lot of quality but low yielding Southern business as a result so have looked at how they can get this back in a responsible manner.

    They won't accept rental income even if on tax returns for any income calculations including this so they're really looking for high earners with only 1/2 properties.
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    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com


    I see this mostly for "Let to Buy" when someone wishes to get a BTL mortgage on their current home, so they can let it out and buy a new home.

    The BTL market for people with 1 or 2 properties is VERY big, however these people are lickly to use a local broker, not one of the brokers on property tribes.
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