YBS Commercial Mortgages has reduced the stress rate applied to BTL affordability calculations on its commercial BTL products.
The positive change effectively increases the volume of lending that can be provided to borrowers.
The stress rate has been reduced from 125% ICR at pay rate plus 0.30%, to stressing at 125% ICR at pay rate.
This move recognises the reality faced by UK landlords who face a challenging interest rate environment, as well as ongoing economic headwinds.
The change will increase what they can borrow, subject to remaining within the lender’s 75% LTV criteria.
This will enable landlords to borrow more on these properties, freeing up capital to invest, or to undertake property maintenance.
For example, for each £1m of assets, based on a yield of 4% (rental income of £40,000 per year), assuming a five-year fix at 5.60%, landlords will be able to borrow around 5.5% or £30,000 more.
Tom Simpson, managing director at YBS Commercial Mortgages (pictured above), said: “We understand the role that landlords play in providing much needed, quality rented accommodation, which in the current climate, are in short supply.
“We hope that reducing our stress rate will provide the support that their landlord clients need, improving their ability to borrow more in the current, more challenging interest rate environment.
“As a responsible lender, focussed on the importance of high-quality accommodation, these changes will also benefit tenants, as more landlords have access to our product suite.”
