A&L advertising claim for B2L product is misleading

I would like to draw attention to a lender’s misleading advertising and marketing.

Alliance & Leicester insists on associating a specialist buy-to-let rate with the words ‘100% rental cover’. But its calculation doesn’t refer to the pay rate which is in fact derived from the Bank of England’s base rate plus 1%.

I suppose the justification for the 100% rental cover claim is that there is a distinction relating to the amount of cover required based on LTVs.

For prime buy-to-let deals, it must either be 100% up to a maximum 75% LTV or 110% up to a maximum 85% LTV. However, both 100% and 110% rental cover requirements are still calculated on an interest-only basis using the BoE base rate plus 1%.

Can I request that advertising to fellow professionals be fair and that rental cover calculations reference the pay rate? It doesn’t fool anyone and if it was marketed accurately it might also show up on Trigold correctly.

Gary Williams
MAST Financial Consultancy
By email