Molly Dix and Kristen Leech from Oportfolio with Clydesdale Bank representatives
New Clydesdale Bank buy-to-let criteria changes have been announced this week. In a message to all subscribing brokers at the beginning of the week, the Scottish based bank announced that they would be making a major change to their buy-to-let criteria that would significantly improve borrower’s accessibility. So what is this major change?
Clydesdale Bank Buy-To-Let Criteria
Like most buy-to-let lenders, Clydesdale bank has several requirements that potential borrowers must meet before the bank will consider lending to them. These criteria rules and regulations are enforced to ensure that a) people can afford the loan that they are borrowing b) aren’t getting a buy-to-let loan for anything other than a straight forward rental property e.g. committing mortgage fraud. Here is a brief breakdown of Clydesdale’s standard buy-to-let criteria from their website:
- We can lend to first time buyers and for let to buy
- At 75% LTV, we can lend up to £1m. This increases to £1.5m in London and South East England
- At 80% LTV, we can lend up to £500k on Interest Only or up to £750k on Full C&I
- We can lend to portfolio landlords if they are requesting a remortgage with no additional borrowing
- The maximum number of properties that can be mortgaged with Clydesdale & Yorkshire Banks is 3, with a combined debt of £1m (£1.5m in London & South East England)
- We cannot lend to anyone who either has more than 8 BTLs in their portfolio or who has a higher level of gross rental income than non-property related income
- We do not lend on HMOs – properties rented out by at least 3 people who are not from 1 household (e.g a family) but share facilities like the bathroom and kitchen
- Residential & personal expenditure – We will make a full assessment of the client’s personal and BTL expenditure position to ensure we are comfortable with the affordability position
No Minimum Income For Buy-To-Let Affordability
Most buy-to-let lenders will need the borrower to have a minimum income (usually around £20-25K) and a lot of lenders will use this income in the lending affordability, as well as potential rental income, to determine the maximum loan amount they are willing to offer. However, Clydesdale have announced that they will now require no minimum income and no minimum rental cover requirement as long as the loan itself is affordable.
This is great news for people such as landlords with properties that they need to remortgage with low rental income. They will no longer be completely written out of the affordability process and now have much more of a chance to be considered for a buy-to-let loan with Clydesdale bank. It also could mean that people with low incomes like pensions or part-time workers who need small buy-to-let mortgages could be considered for a loan without being scrutinised at affordability stage because of minimum income requirements.
Speak To A Buy-To-Let Specialist
If you own a buy-to-let property or are thinking of getting a buy-to-let loan, speaking to a mortgage advisor about your options is definitely a great way to kick things off. At Oportfolio mortgages, we have a team of dedicated advisors and administrators who live and breath buy-to-let mortgages.
Give our team a call today for a free initial mortgage consultation. We’re here to help.
