The introduction of top slicing allows landlords to top up the income being used to pass a lender’s affordability assessment using their salary or dividends, for example, where the rental income alone is insufficient to meet the interest coverage ratio (ICR) requirements.
Claire Askham, head of mortgage sales, said this change will provide greater flexibility for landlords who demonstrate strong personal income but where the ICR may not align.
“As our lending covers England and Wales, we wanted to ensure this option is available to support such cases, however the society maintains minimum income requirements for buy-to-let (BTL) and holiday let applications, which must still be met,” she said.
Top slicing is not available for expat applications due to the society’s policy of not accepting foreign income.
The option is available for standard BTL, holiday let and limited company applications.
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“It is another positive criteria change to help support our intermediary brokers,” she added.
Earlier this month, the lender made another change to its criteria by upping the loan to value (LTV) on its credit restore range from 70% to 75%.
