Barclays is introducing a new approach to handling buy-to-let applications which will make the whole process easier.
The bank will now allow personal income to be included in the assessment of BTL affordability and used in case of a shortfall in rent.
“There are only a handful lenders that allow any shortfall in the rental income used to calculate affordability to be met by the applicant’s disposable income. Barclays’ new policy provides a greater opportunity for those planning for their financial future and choosing to invest in rental properties to help support their longer term goals of, for example, paying for their children’s’ university fees or enhancing their lifestyle in retirement,” Andy Gray, managing director of mortgages at Barclays said.
The new approach, in force from today (26 January), will require clients to provide information about their net income, commitments and dependents, all residential mortgages (including permissions to lets), the total of all BTL mortgages outstanding and the total rent received.
The applicants also have to state that the application does not go into retirement and there are no foreseeable changes to their income.
Barclays is launching the new approach after a successful pilot last year.
Derram Attfield (42), a self-employed recruitment professional in London, is among the first to use Barclays’ new service. He comments:
“There’s no guarantee of a state pension being available when it comes to my retirement; and being self-employed I recognised the importance of having a good retirement plan in place. Barclays’ new policy has helped me to purchase a rental property and to maximise the opportunity of both the growth in equity in the flat, and the regular rental income, to support my pension plans.”
