Back to December 2016

Leeds launches unique proposition to Buy-to-Let market

Leeds Building has announced new criteria following the PRA’s changes to underwriting standards for buy-to-let (BTL) mortgages.

The changes, which come into effect on 1st January 2017, are designed to support this important segment of the market.

Richard Fearon, Chief Commercial Officer said, “We believe the combination of an income coverage ratio of 140%, a specific and lower stress test rate for re-mortgages, our supporting criteria and market expertise brings a unique proposition to the buy-to-let market.”

Summary of Changes:

  • Income coverage ratio (ICR) for BTL and Holiday Let mortgages will go up to 140%, from 125%.
  • ICR assessed taking into account mortgage interest tax relief.
  • Affordability stress test rate is 5.50% for purchase and capital raising re-mortgages.
  • Affordability stress test rate where there is no additional borrowing is 5.00%.
  • An ICR assessment is not required for existing Leeds Building Society BTL customers who have come to the end of their existing deal and there is no additional borrowing.
  • Removed the minimum income requirement (previously £25k pa or £40k for joint applicants).
  • Available up to 70% LTV

Richard added, “Around 60% of BTL advances are re-mortgages and our affordability stress test rate where there is no additional borrowing is 5.00%, which will support a significant number of landlords with existing properties looking to refinance their portfolio.”


Notes to Editors

Key Statistics

BTL mortgages outstanding*:£227bn.

BTL* 2015 2016 YTD
Gross Advances £37.9bn £31.5bn
% of Re-mortgage Gross Advances 58% 61%

 *Source: CML, New and outstanding buy-to-let mortgages, UK (15/11/16).

To discuss a new case with one of our mortgage development team, mortgage introducers should go to to find details of their nearest Business Development contact.

Leeds Building Society won the awards for Best Building Society Savings Provider and Innovation in Personal Finance (Part and part mortgages) at the 2016 Moneyfacts Awards.

The Society received the ‘Innovation Award (Lenders)’ at the Mortgage Finance Gazette Awards 2016, the third consecutive year it has won this category, as well as the award for ‘Product Innovation (Lenders)’.