The Lloyds Banking Group-owned lender had previously refused to accept applications from landlords who planned to rent a property in this way but has relaxed its rules from today.
A statement from the lender said: “Through its BM Solutions brand, Lloyds Banking Group is a leading buy-to-let lender.
“Recognising the increasingly important role buy-to-let has in meeting housing demand, we have reviewed our current policy relating to tenants receiving housing benefits and its impact on our lending decision.
“We can confirm that we are updating our policy. From today (8 March), this condition will not be enforced on new or existing mortgages.”
Earlier this month rival buy-to-let lender The Mortgage Works was forced into a u-turn on its policy on housing benefit tenants. After deciding that it would no longer accept applications from landlords who planned to rent to these tenants it reversed the decision at the end of last week.
