The lender will now take a broader view of customer affordability using landlord’s earned income to supplement the Interest Coverage Ratio (ICR) for buy to let loans, where the rental property yield in itself does not meet minimum requirements.
It is only available to non-portfolio landlords looking to borrow through a limited company arrangement or on an individual basis and is supported with an online calculator to help assess and confirm eligibility.
The lender said it is likely to prove particularly useful for those high earning individuals with low residential leverage, or high yielding individual or limited company non-portfolio landlords, where the subject property is low yielding.
OneSavings Bank sales director Adrian Moloney (pictured) said the lender’s new broader approach to buy-to-let affordability would provide additional flexibility to allow earned income to form part of the affordability assessment.
“High property values, particularly within London and the South East, can result in lower yields and as a result, some applicants may be refused lending, even on good quality properties,” he said.
“We’re looking to fix that.
“To support this product, we’ve also updated our buy-to-let calculator so brokers can immediately see if a case fits the income backed criteria prior to submission, thereby simplifying the process and enabling a faster turnaround,” he added.
Buy to Let Club managing director Ying Tan was pleased the lender had continued to recognise the needs of brokers with its latest move.
“The lending landscape has changed considerably as a result of the new rules on affordability and landlords in areas with high property prices especially are feeling the impact,” he said.
“By taking into account an investor’s other incomes to support their application, Kent Reliance is helping landlords to navigate the market challenges and I’m sure this move will be widely welcomed.”
Coreco director Andrew Montlake added: “There are a whole host of buy-to-let landlords who invest in property for long-term growth who have spare income to make up for lower rental yields, and more choice of lenders who top-slice is needed in the market.
“Lenders need to continue to innovate and evolve their offerings to meet ever-changing circumstances and Kent Reliance has a great track record of doing this.”