Brokers have been infuriated by changes NatWest has made to its buy-to-let criteria without informing them.
The lender, part of the Royal Bank of Scotland group, had previously calculated how much clients could borrow by yield ratio. If there was any fall in this it would look at a client's individual circumstances to work out whether they had sufficient funds to cover eventualities like being unable to find a tenant for a couple of months.
But NatWest says that as of April 13, unless there is a guaranteed 10% return on what the client borrows, it will not lend.
When one broker, who wishes to remain anonymous, told NatWest that he had failed to receive the message informing him of the change, he was told that the lender was not planning to tell anyone about it. The result was that the two mortgages he had been working on were turned down.
He says: “This is appalling. I had two cases sent back last Monday which fitted NatWest criteria 15 days ago. I now have to go back to the client and say the deals cannot be done at that lender any more. It's embarrassing to say the least – and all down to the fact that NatWest did not tell anyone.”
However, the lender says that as far as it is concerned there has been no change to its lending criteria for buy-to-let and its current stance is that for some time it has had a requirement that annual rental income must cover 10% of the loan amount.
Ian Villiers, spokesman for NatWest, says: “We do consider exceptions to this policy and from time to time will review the guidance given to our underwriters on when to look at these.”