Keystone has relaxed the criteria around its buy-to-let proposition and reassured landlords it remains keen to do business following recent regulatory changes.
The specialist lender has raised the maximum individual loan available from £750,000 to £1m on borrowing up to 65 per cent loan-to-value, which is being offered to personal borrowers and those using a limited company.
It has also reduced the minimum applicant age from 25 to 21 and will now consider non-home-owners who own at least one buy-to-let property in the UK.
In addition, the minimum length of employment or self-employment in a particular role – previously set at one year - has been scrapped.
While Keystone previously only accepted individuals with permanent rights to reside in the UK, it has broadened its residency requirements to include skilled workers on both Tier 1 and Tier 2 visas.
David Whittaker, chief executive of Keystone Property Finance, said the changes had been made “to show both portfolio and non-portfolio landlords that we are open for business, and the new PRA guidelines will not alter our lending appetite”.
A further change to criteria means high-rise blocks will be accepted on a case-by-case basis, depending on the number of storeys and the percentage of private ownership within the block.
The criteria enhancements follow the introduction of more stringent underwriting standards from the Prudential Regulation Authorit(PRA), which require lenders to assess the viability of portfolio landlords’ entire portfolio when they wish to purchase a new property.
Coming on top of earlier tax hikes, it has led to fears that some landlords could flee the market or reduce their portfolio size.
Keystone's criteria enhancements are aimed helping both portfolio and non-portfolio landlords.
Michelle Lawson, director at Hampshire-based Lawson Financial, welcomed Keystone’s changes.
She said: “We just need some innovation, and it is nice to see people reacting to the market. They are specialist as well, and specialists will come to the fore when they do make changes in buy-to-let.
“I think there will be more changes in the buy-to-let market – lenders are going to have to be more receptive.”
simon.allin@ft.com
