Leeds Building Society bucks trend by relaxing buy-to-let affordability criteria



Leeds Building Society has reduced its buy-to-let stress rate in a bid to attract more landlords.

The society has cut the stress rate from 5.5% to 4.5% for purchases and remortgages with additional borrowing on fixed rates spanning at least five years.

Martese Carton, director of mortgage distribution at Leeds Building Society, said: “As borrowers continue to seek more certainty over costs, we’re seeing a rising number of Buy to Let landlords seeking longer term fixed rates, a trend that was already noticeable, even before we moved into a rising inflation and interest rate environment.

“This change will support more borrowers’ aspirations and give them the stability and security over their monthly payments.

“Reducing our stress rate for longer term fixed rate products gives the applicant greater borrowing power with an added opportunity to capital raise to improve their properties’ energy efficiency.”

The society’s 5-year fixed rates start at 2.36% to 60% LTV with a £999 fee.

Leeds’ decision to loosen its affordability criteria is the opposite move to Santander and Metro Bank.

Santander has made it harder for landlords by increasing its income coverage ratio to 150% at 4.25% on 5-year fixes, up from 145% at 4%.

This cuts the maximum loan from around £206,000 to £188,000, and suggests the Santander has made the adjustment with an eye on the Bank of England’s latest base rate rise.

Metro has similarly increased its stress rate to 140% at 4%, up from 140% at 3.5%.

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