The Intermediary – June 2025 - Flipbook - Page 75
B RO K E R B U S I N E S S
Case clinic
above market rate, then for affordability purposes
we would use the market rate plus 10%.
HARPENDEN BS
Harpenden Building Society would be pleased to
consider this case using top-slicing, providing the
client was not a portfolio landlord.
Using our ICR, the maximum mortgage would
be £148,000. However, with top-slicing we should
hopefully be able to achieve the advance the
client requires.
We would require the full details of the client’s
income and commitments in order to carry out a
full affordability assessment.
TOGETHER
If the ICR would not fit onto traditional
calculations, Together can look to assess total
secured debt-to-income ratio with the landlords
other properties to help boost affordability for this
property application.
50% of the net income received from other
income can be used to boost the affordability,
thus providing additional income to support
the application. This can be provided via our
‘Accountant’s Reference Letter’.
BUCKINGHAMSHIRE BS
The society can now consider top slicing on buyto-let applications. The applicant would need to
provide a full budget planner so affordability can
be checked to see if the applicant has enough
disposable income to help support the shortfall.
The applicant would need to have clean credit for
buy-to-let lending.
C AS E S I X
First-time landlord
intentions
client with no property ownership history,
earning £42,000 annually, wants to invest
in a £200,000 buy-to-let flat in Liverpool,
using a 25% deposit from savings and a family gift.
Many lenders immediately rejected their
application on the basis that the client was a firsttime buyer and first-time landlord – a combination
some deem too risky. Despite a current healthy
rental estimate of £1,100 per month, stress tests
A
were tight and lenders were concerned about the
applicant’s lack of experience and modest income
buffer for covering property maintenance or
tenant voids.
SUFFOLK BS
We’d need to look at this with our manual
underwriting hat on.
We would need evidence that this is not a
backdoor residential mortgage application – where
the applicant is applying for a BTL mortgage but
intends to live in the property themselves, rather
than rent it out. We’d need to know where the
applicant is currently living, and where in relation
to Liverpool.
We would also carry out a residential
affordability assessment to ensure the application
would work on a residential basis as well. If the
latter worked out, and we were comfortable with
the finer details, then we could consider this
subject to rental ICR stacking up.
UNITED TRUST BANK
UTB would also be unable to consider lending to a
first-time buyer and first-time landlord scenario.
Our lending requirements insist on the customer
owning another property in the UK at the time of
the application.
HARPENDEN BS
Harpenden Building Society lends to first-time
buyers and first-time landlords providing they
meet our minimum income requirement of
£30,000 per annum, excluding the rent from
the subject property. Also, the property must be
professionally managed. We do have restrictions
with regard to flats and would need to know more
about the property before we could fully commit.
TOGETHER
At Together we lend to both first-time buyers and
first-time landlords. In this case, as long as the
Income Credit Report and stress testing achieved
the required affordability, we could lend to this
applicant at 75% LTV of the subject property,
assuming it was of standard build.
BUCKINGHAMSHIRE BS
The society can consider this, but it would be
based on full affordability and not ICR rental. The
applicant would need to be able to afford this on
capital and interest alongside living expenditure
and debts. We would need to assess it this way to
ensure that it is not a back top residential. ●
June 2025 | The Intermediary
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