Virgin Money 

Virgin Money changes buy-to-let lending criteria

Virgin Money changes buy-to-let lending criteria

Virgin Money has made changes to its buy-to-let (BTL) lending policies.

The interest stress rate on five-year fixed rate products has been reduced from 5.24 per cent to 5 per cent.

The straight balance swap stress rate has been reduced from 5.99 per cent to 5.5 per cent.

Andrew Asaam, director of mortgages at Virgin Money, said: "Virgin Money supports a wide range of segments in the mortgage market and that is why we have made a number of enhancements to our buy-to-let policy.

"The rental sector plays an important part in the make-up of the mortgage landscape and we are confident these improvements will be well-received by landlords."

A landlord's personal income will now be considered to cover any shortfall in rent between 100 per cent  and 145 per cent of the mortgage payment, calculated at an interest rate of 5.5 per cent.

In order for personal income to be used, there is a minimum income requirement of £50,000.

This is excluding income received from buy-to-let properties.

Alex Reynolds, IFA at London-based Advies Private Clients, said: "The changes are very welcome and will allow more landlords to remortgage and buy properties using Virgin Money.

"The addition of using personal income is particular useful for many clients around London where yields can be low but there have the excess income to cover any shortfall in the lender’s calculation.

"I believe more and more lenders will go down this route in the next six to 12 months."

aamina.zafar@ft.com