Buy-to-let investors wishing to approach C&G for funding must now have no more than three properties mortgaged to any of the lenders in Lloyds Banking Group, which includes BM Solutions, and mortgage commitments of £500,000 or less across the group.
Borrowers must also have a minimum sole or joint income of £35,000. Cases that don’t fit these criteria will have to be individually underwritten.
A C&G spokeswoman says the brands remain separate.
She adds: “We are beginning to combine criteria but the brands have separate rules.”
A spokeswoman for BM Solutions says the lender remains committed to buy-to-let brokers.
She adds: “We will change brand policies when appropriate.”
But brokers are concerned that as BM Solutions falls under the umbrella of Lloyds Banking Group, it could only be a matter of time before it follows C&G in tightening its lending criteria.
Geoff Laird, principal of Tonbridge-based Buy-to-Let Funding Services and who used to work at Paragon Mortgages, says: “I would hate to see the demise of BM Solutions but I feel the egg timer is running out for the brand.”
Laird suspects Lloyds Banking Group is only now realising the extent of the buy-to-let assets on its books, following the merger with HBOS.
He adds: “I wonder if there are a number of toxic buy-to-let loans with BM Solutions that are similar to those held by Mortgage Express – agreed as buy-to-let but used for residential homes.
“I also wonder whether Lloyds Banking Group, while doing its due diligence, has realised it has some problems.”
Jonathan Clark, mortgage partner at Chadney Bulgin, says C&G’s criteria changes are an attempt to streamline a complicated process and that it has to factor in a higher level of risk.
He says: “This is what happens when banks merge. There could be concerns that a client may now have five or six properties with BM Solutions whereas before the risk was shared between banks.”
Mike Fitzgerald, sales director at Brentchase Financial Services, thinks brokers are unlikely to approach C&G with buy-to-let business from now on.
Fitzgerald says: “C&G can make its rules as tough as it likes because I don’t think brokers will be using it.”
Danny Lovey, proprietor of The Mortgage Practitioner, says: “We are seeing a rationalisation of the buy-to-let market share Lloyds Banking Group is prepared to take on. It is arguably taking a disproportionate amount.”