UTB to accept higher passing rents on BTL cases

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  • 26/09/2023
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UTB to accept higher passing rents on BTL cases
United Trust Bank (UTB) has adapted its interest cover ratio rules in a move it said is designed to help landlord borrowers.

The lender noted that rising mortgage costs and current rent levels have led to challenges for landlords in passing interest cover ratio (ICR) calculations. This has meant that landlords have been limited in how much they can borrow.

Typically lenders base their underwriting decisions on either the declared rent from the landlord or the figure put together by professional valuers, whichever is lower.

However, UTB will now accept passing rent figures from landlords which are as much as 10 per cent higher than those verified by a valuer, with this change applying immediately to all single dwellings, houses in multiple occupation (HMO) and multi-unit blocks (MUBs).

The change will not apply to holiday lets nor serviced accommodation. UTB said that it already uses passing rents from the previous year or verification from holiday letting agencies for such cases.

Caroline Miriakan (pictured), sales and marketing director of mortgages at UTB, explained that the lender is always looking for ways to help brokers deliver the funding that clients require.

She added: “At present, pressures on ICRs are making it difficult for landlords to obtain the buy-to-let mortgages they need to buy and refinance, and we believe this flexibility on passing rent will make a real difference to brokers struggling to place cases at the upper end LTVs.”

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