View more on these topics

Switching to buy-to-let banned as Platform tightens up its criteria

Platform is no longer allowing cus-tomers to switch their residential mortgage to buy-to-let.

The intermediary lender of The Co-operative Bank announced a raft of changes to its buy-to-let criteria last week.

As well as not allowing borrowers to switch to a buy-to-let deal, it will no longer accept applications from self-employed professional prop-erty developers and landlords.

Also, the maximum number of buy-to-lets individuals can have with all lenders, including Platform, will be restricted to five.

In September Lloyds Banking Group limited buy-to-let property portfolios to a maximum of three properties or £2m worth of lending – whichever is exceeded first. Platform’s maximum property exposure is three properties or £1m.

A spokesman for Platform says: “Platform remains committed to the buy-to-let market and to main-stream lending and we will shortly be extending our range of buy-to-let products. We have a wealth of experience in buy-to-let and are clear about the area we want to focus on. This is reflected in our criteria.”

David Hollingworth, head of communications at London & Country, says Platform’s decision not to allow borrowers to switch to buy-to-let deals could be aimed at limiting its exposure to accidental landlords.

He says: “Platform is not alone in preventing borrowers from switching to buy-to-let deals. Its decision could be tied to concerns over people becoming accidental landlords or instances where they cannot sell their property so move to buy-to-let temporarily.”

Hollingworth says as more people get into financial distress and find it hard to keep up mortgage payments lenders may become weary of them switching to buy-to-let as a means to keep their property.

Figures released by Paragon Mortgages last week show four in 10 brokers reported an improvement in the availability of buy-to-let mortgages in Q3 2010.


Housing benefit is a luxury for some and should be cut

I was interested to read recent articles warning that the government’s proposed cuts to housing benefit are a recipe for destitution. The reason rents are so high is because landlords can get away with charging scandalous amounts to tenants claiming housing benefit as the government foots the bill. This pushes rents up everywhere if there […]

Focus on providing appropriate cover, not just commission

Sainsbury’s last week revealed that 43% of mortgage holders in Britain do not have their mortgage contributions covered by life insurance. Why is the focus always on life cover for a mortgage? Whatever happened to looking at what overall protection an individual family needs? Maybe if we started doing the job the way it should […]


News and expert analysis straight to your inbox

Sign up