The Intermediary – August 2025 - Flipbook - Page 82
B RO K E R B U S I N E S S
Case clinic
BTL products. We would not require any minimum
personal income, as we would look at the Interest
Coverage Ratio (ICR) calculation for affordability
on its own merits. If they were an experienced
landlord, we could look to utilise top slicing for
additional affordability if the ICR was to be failing.
90% of the projected market rent as confirmed by
a valuer or local sales agent.
This could then be used to towards the ICR
affordability and there would be a maximum of
70% LTV, if the property is of standard build.
BUCKINGHAMSHIRE BS
Similarly to other lenders, we will require an
AST to be in place. We also require proof of one
month’s rent.
The client should formalise the agreement,
carry out all other due diligence, and obtain the
necessary certificates before we can proceed with
the remortgage.
WEST ONE LOANS
A minimum income of £25,000 would be required
and the applicant would need to be a homeowner
themselves. As the income is £28,000 then it
would fit the minimum income rule of the society.
WEST ONE LOANS
West One does not require a minimum income
in assessing affordability of a BTL property, even
for first-time landlords. Assuming the applicant
is a basic rate taxpayer, they should qualify for a
product in our standard BTL range.
C AS E F I V E
Self-employed with rising
income
C AS E FOU R
Accidental landlord with
no AST
homeowner has moved in with a partner
and wants to let their original property
informally to a friend, charging £1,000 per
month. They are applying for a BTL remortgage
to raise capital but have no tenancy agreement
in place. Several lenders declined the application
due to lack of a formal Assured Shorthold Tenancy
(AST). Even though rent has been paid consistently
and bank statements are available, underwriters
require a proper tenancy agreement and proof of
compliance with landlord responsibilities – gas
safety, deposit protection – before proceeding.
A
BUCKINGHAMSHIRE BS
The society would not be able to consider this
without an AST in place.
UNITED TRUST BANK
As the intended security is being let to a friend
and would therefore fall under Consumer
BTL guidelines, this isn’t a case we would
currently consider.
80
self-employed marketing consultant has
applied for a mortgage on a £390,000
home with a 10% deposit. Their latest
year’s income is £61,000, up from £37,000 the
year before.
Although the most recent figures show strong
growth, some lenders have averaged income
across two years and applied caution due to the
sharp rise.
The client has excellent bank statements and
a solid pipeline of work, but not all underwriters
have been willing to base lending on one strong
year alone.
A
UNITED TRUST BANK
UTB always looks to use the latest year’s accounts
and income without averaging across the last two
years. Any significant increase in income, which
this example details, would require a plausible
explanation for the increase with further details
providing clarity on the sustainability of the
increase and expected income going forward. If
the self-employed applicant is a sole trader, this
would be supplied by the applicant themselves.
If the applicant is a limited company director, an
explanation from the accountant would add more
weight and provide us with more comfort.
TOGETHER
HARPENDEN BS
Together could consider this application on
referral. Generally, if no AST is in place we will use
We could consider this case using the latest year’s
income towards affordability. We will require
The Intermediary | August 2025
