As a result of the changes, the minimum interest cover is to be reduced to 105 per cent of the pay rate of the product, with no proof of income or proof of mortgage payments needed on individual loans up to £500,000. Loans on individual properties up to “.5 million will be considered by the lender, with borrowers able to build a portfolio of properties up to an aggregate of £5 million, with no limit on the number of properties.
Woolwich has also made changes to its loan-to-value ratio, with an LTV ratio of under 75 per cent and where the borrowers aggregate debt does not exceed £1 million. The lender also confirmed that it would not require borrowers to have a minimum income of £20,000.
Announcing the changes, Andy Gray, head of mortgages at the Woolwich, said: “We know that rental demand is very strong in many areas as high property prices are forcing potential home buyers out of the market and into the rented sector. But despite continuing high prices, and forecasts of a slowdown in house price inflation, there is no actual expectation in the market of price falls, therefore the buy-to-let market still remains very popular as a long term investment for many people.”
However, the move was criticised by a broker, who wished to remain anonymous, who suggested that the enhancements could cause the lender some problems. He said: “The lending is irresponsible. Woolwich: The new Northern Rock? What a non-conforming mess this will be.”
Get the daily news delivered to your inbox
Find the latest industry jobs
Register for the next forum
