United Trust Bank (UTB) Mortgages for Intermediaries has adjusted its policies to help landlords and buy-to-let mortgage brokers navigate the increasing pressure on Interest Cover Ratio (ICR) calculations.
Current rent levels and rising mortgage costs have led to more conservative ICR calculations, often limiting loan-to-value ratios well below the conventional 75% mark.
UTB will now accept passing rent figures from landlords that are up to 10% higher than those verified by a valuer.
This change is effective immediately and applies to all single dwellings, Houses in Multiple Occupation (HMOs) and Multi-Unit Blocks (MUBs).
Traditionally, lenders have based their underwriting decisions on the lower of two figures, either the declared rent from landlords or the valuation from professional valuers.
By allowing a 10% leeway above the valuer’s figure, UTB aims to make it easier for landlords to secure mortgages and remortgages they might otherwise have been unable to obtain.
This policy adjustment does not extend to holiday lets and serviced accommodations, as UTB already uses passing rents from the previous year or verification by a holiday letting agency for these categories.
Caroline Mirakian (pictured), sales and marketing director – mortgages, United Trust Bank said: “We are always looking for ways to help brokers provide the funding their customers need.
“At present, pressures on ICRs are making it difficult for landlords to obtain the BTL mortgages they need to buy and refinance, and we believe this flexibility on passing rent will make a real difference to brokers struggling to place cases at the upper end LTVs.”
