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Natwest makes BTL tweaks including stress test; Hodge adjusts criteria – round-up

  • 10/06/2024
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Natwest makes BTL tweaks including stress test; Hodge adjusts criteria – round-up
Natwest has improved its buy-to-let affordability calculator, changed its portfolio landlord assessment and added dynamic product stress rates.

Natwest said it had brought out a streamlined affordability calculator for buy to let, which contains 11 key questions for most customers.

This means brokers can have a “quick and easy way to calculate landlord’s affordability”.

The lender is also basing portfolio landlord’s assessment on loan to value (LTV) and rental income on the subject property and their portfolio.

It also removing personal income assessment for portfolio landlords, cut packaging requirements for portfolio landlords and underwriters as they do not need to validate personal income or commitments.

Brokers will be responsible for validating customers’ income and keep documentation, which will make the journey simpler.

The firm is also bringing out dynamic product stress rates to its buy-to-let applications so the stress rate and maximum loan amount will be “driven by the product rate chosen and the term of that product, meaning the landlord’s affordability is personalised to them”.

A maximum loan amount or stress rate will not be locked in until an application is submitted and the lower the stress rate the higher the maximum lend will be.

The changes come off the back of a number of buy-to-let rate changes the lender made earlier today.

Brad Fordham, head of mortgage distribution at Natwest, said: “We want brokers to know that the changes we’ve made to our buy-to-let mortgage proposition make us even more reliable, consistent and flexible for their landlord customers. In particular, the changes to our buy-to-let affordability calculator make it quicker and easier than ever for brokers to calculate landlords’ affordability.”


Hodge ups age of first death stress and will accept annexes

Hodge has increased the age of first death stress on its 50+ product and improved criteria for annexes in its wider range.

The stress test ensures the mortgage stays affordable for the surviving customer in the event of the death of their partner.

The age of first death stress will be 87, an increase from 82 previously. This is informed by Office for National Statistics data, which shows an improvement in life expectancy.

Hodge will now lend on properties that have one fully self-contained annexe as long it is a let on a short-term basis for holiday letting or occupied by related parties to the property owner.

The move recognises the growth of annexes due to increased cross generational living and more people working from home.

Jonathan Matthews, head of property risk at Hodge, said: “We continue to see demand for properties with a self-contained annexe as families look to support one another intergenerationally. This change represents further flexibility in our property criteria, removing any ambiguity around annexes for your customers.”

Emma Graham, business development manager at Hodge, added: “This enhancement to the first death stress will enable customers to spread their mortgage across a longer mortgage term, making monthly payments more affordable as they lend up to and into their retirement.

“We continually strive to incorporate and reflect on the feedback we receive from brokers. By implementing these latest changes, we aim to better support customers who need more flexible lending arrangements, especially in the current challenging market conditions.”


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