The lender will also reduce the stress test on new buy-to-let deals from 5.79% to 5.50%, with all changes being implemented from 26 May.
Barclays said it was tightening affordability criteria as a result of the reduction in landlord tax relief available from next April, which will be reduced to the basic rate of 20% over a four-year period.
Foundation Home Loans announced its intention to increase its rental coverage requirement this week, after Nationwide’s buy-to-let arm The Mortgage Works halted lending to buy-to-let customers above 75% loan-to-value and lifted its rental coverage ratio to 145%.
“As a responsible lender we want to ensure that your clients can afford their repayments plus, other costs associated with the property where the borrower is responsible for payment such as, council tax and management/letting fees,” Barclays said in a statement to brokers.
It will continue to carry out a full income and expenditure assessment, allowing customers to use personal disposable income, including bonuses, to contribute to any shortfall in rental cover.
Existing Barclays buy-to-let customers looking to rate switch will be unaffected by the change. Last applications to qualify for Barclays’ existing policy should be submitted by close of business 25 May.