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Buy-to-let top-slicing changes make interesting reading – Ying Tan

by: Ying Tan, managing director of Buy to Let Club
  • 11/06/2018
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Buy-to-let top-slicing changes make interesting reading – Ying Tan
One issue has dominated the industry – and, indeed, our email inboxes – over the last month above all others. I’m talking, of course, about GDPR.


If you’re not already fed up of being inundated with emails asking you whether you want to receive emails then you’re a more patient person than me.

Along with the data protection bombardment, however, there were a handful of interesting emails popping into my inbox this month.

One of which was courtesy of West One which announced it will now allow borrowers to include supplementary income to make up short falls – otherwise known as top-slicing.

The lender says it will consider the inclusion of supplemental income towards the affordability assessment subject to certain criteria including the fact rental income must cover the combined first and second charge monthly payments by at least 100%.


Virgin changes

Virgin Money also made an announcement regarding supplementary incomes.

The lender will now consider landlords’ personal income to cover any rental shortfall between 100% and 145%, calculated at an interest rate stress of 5.50%.

In order for personal income to be used, there is a minimum income requirement of £50,000 (combined income for joint applications).

If you declare all of your client’s credit commitments, Virgin’s affordability calculator will automatically take personal income into consideration, where the rental income does not meet 145% of the mortgage interest payment.

Virgin has also lowered its interest rate stress for five-year fixed rate products from 5.24% to 5%.


Foundation rate cuts

Elsewhere Foundation Home Loans has been reducing its rates.

To mark the arrival of summer the lender says it has refreshed its buy to let range, with some rates cut by as much as 40bps. Rates now start from 2.79%.

Meanwhile, Bank of Ireland Intermediaries is offering a new range of rates including a two-year fix up to 60% loan to value at 1.54% and a five-year fix up to 75% at 2.93%.

The lender’s buy-to-let offering includes no minimum income, no valuation fee and maximum age of 80 at the end of term.

First time landlords are also welcome.


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