The announcements come on the back of the report issued by the Prudential Regulation Authority (PRA), outlining its required underwriting standards in the buy-to-let sector. Firms will have to implement the changes to interest coverage ratio tests and interest rate stress tests by 1 January 2017.
The regulator released its report ahead of changes being introduced to the market, from April 2017, that impact the amount of mortgage interest relief landlords receive.
A spokeswoman for The Mortgage Works said: “There will be no impact for existing TMW borrowers as a result of the changes to the rental cover ratio, for those who are seeking a product switch or transfer of equity, providing no additional borrowing is involved.”
She added: “If a customer is new to TMW and seeking a remortgage from another buy-to-let lender, the current rental cover ratio of 145% will be applied. This is to ensure that all landlords can maintain a positive cash flow, particularly as the tax changes relating to buy to let start to take effect.”
BM Solutions said it expected to confirm any changes to its affordability criteria before the end of the year. A spokeswoman said: “We will be in a position to announce our intended plans well ahead of the January PRA deadline for implementation.”
She added: “We are currently considering a number of options and have invested time and resource to address the change in tax regime while helping provide the right level of protection for borrowers. Our customers who have come to the end of their fixed term and maintained existing payment arrangements will be eligible for a new product rate maintaining their current terms and conditions.”
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