The intermediary arm of Newcastle Building Society has increased its buy-to-let rental coverage ratio to 145% on a reference rate of 5.5%, up from 125% on a reference rate of 5%.
Newcastle Intermediaries follows similar changes made by other lenders, including The Mortgage Works, Barclays and Foundation Home Loans who all upped their rental cover expectations to 145%.
From April 2017 the tax relief landlords can claim on mortgage payments will be reduced from 45% to 20%.
Head of mortgage distribution at Newcastle Intermediaries, Steve Carruthers, said: “As a responsible lender we are keen to ensure that customers are well positioned to deal with these changes in advance.”
Newcastle has also reduced the maximum number of investment buy-to-let properties it will lend on mortgage properties to three, from five. This does not apply to mortgage-free buy-to-let properties.
Brokers have until 31 May to submit any applications previously agreed prior to this date under the old policy. Any buy to let applications currently being processed will continue to be assessed under the old policy.