If the total number of properties, including the property to be mortgaged, is four or more, the applicant is a portfolio landlord. This includes limited company buy-to-lets.
Properties held in the names of any of the borrowers, solely or jointly, should be included in the portfolio.
Key criteria
The following criteria apply to the entire buy-to-let portfolio. This includes unencumbered properties and properties to be managed.
The maximum LTV for the portfolio is 75% LTV.
The maximum buy-to-let portfolio size is 15 buy-to-let properties. At most, five properties or 50% of the portfolio can be mortgaged with us, whichever is smaller.
The rental income must show that the whole portfolio is self-supporting. This includes unencumbered properties and the property to be mortgaged. It must meet the following income coverage ratio calculation:
- Maximum interest coverage ratio: 145%.
- Assumed stressed interest rate: 5.86%.
Process
A completed assets and liabilities form must be provided. It must detail their background, portfolio and business plan.
The business plan must show that the landlord has:
- a portfolio comprising no more than 25% house in multiple occupation (HMO) properties.
- considered the ongoing and future management of their portfolio, including fees.
- at least two years of experience in managing investment properties.
- has grown their portfolio gradually.
- Any properties purchased in the last 12 months shouldn’t have been purchased in quick succession.