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.