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Loan-to-Income Caps for Buy-to-let Applicants

NatWest Intermediary Solutions is introducing a loan-to-income cap of 4.99 times income for all buy-to-let applicants. Rental cover will still be used as a primary benchmark for assessing borrowing levels and NatWest says the new policy is intended to act as a 'secondary safety net'.

The lender will not change its maximum loan size of £500,000, while the maximum LTV of 75% will also remain unchanged. It will introduce the new policy across all channels, including Royal Bank of Scotland and RBS Intermediary Partners from 14 July.

A spokesman says: "This change of policy is being introduced to create greater consistency between buy-to-let and residential lending policy."

Last month, the lender capped income multiples to 4.00 x income for residential applicants borrowing more than £500,000, following a similar move by Lloyds Banking Group. The Financial Policy Committee then made a formal recommendation that no more than 15% of lenders' new mortgage lending can be at more than 4.5 x income.

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