RBS revise credit policy on Buy to Let

Published: June 19, 2008

At a time when many other lenders are withdrawing or pulling back from lending in the buy to let market, RBS Intermediary Partners announced today that from Thursday 19 June, they will be enhancing their credit policy on buy-to-let cases with loans of 75% or less.

The changes should help some buy to let investors who have been experiencing problems in finding a suitable mortgage to replace their current mortgage products as they come to an end.

Jerry Figueroa-Lee, Operations Director at The Mortgage Warehouse commented,

"Any loosening in lending criteria can only be good news for Buy to Let investors. We have seen lenders appetite to lend diminish significantly over the last two months, and so a softening in criteria can only be a good thing.

The adjustments announced mean the minimum rental coverage required for those with 1 - 5 properties is 110% based on the Bank of England base rate plus 1.75% with the percentage coverage increasing to 125% where the loan is between 75% and 85% of the property value.

For those with between 6 and 10 properties the rental coverage required is set to 125% based on the Bank of England base rate plus 1.75%.

RBS advised that customers must have a minimum joint income of £40,000 to qualify for the 110% rental cover.

For customers applying for their first 5 buy-to-let mortgages with RBS Group who meet the 125% rental cover calculation, and do not have more than 10 buy-to-lets in total, no income verification documentation is required.