Leeds BS relaxes income requirements after PRA rule change

Leeds Building Society will now be able to lend more at higher income multiples after changing its loan-to-income reporting.

Leeds is the first lender to take advantage of the Prudential Regulation Authority’s recent relaxation of the rules around LTI reporting.

From June 2014 lenders have not been able to underwrite more than 15 per cent of new residential mortgages at LTI ratios of 4.5 or more.

However, last month the PRA confirmed lenders could report LTI on a four-quarter rolling limit, rather than the fixed quarterly limit that had been in place.


The move was seen as a boon to lenders, many of whom saw the old system as inflexible.

Many firms scaled back their lending at higher LTIs to avoid accidentally going over the limit due to being unable to manage business flow.

But now Leeds will lend at up to 4.75x income for some borrowers, up from its previous limit of 4.5x.

A Leeds statement says: “Regulatory changes by the Bank of England have given lenders more flexibility to cope with fluctuations in business volumes.

“The Society has responded to this change by confirming it will now lend up to 4.75x LTI for borrowers wanting to move home or remortgage, up to 85 per cent LTV.

Leeds Building Society head of intermediary distribution Martese Carton says: “The changes agreed by the regulator will give lenders more flexibility in managing their business flows over a longer period.

“It’s good news for borrowers and brokers and we expect the changes will enable us to help more people have the home they want.

“As a responsible lender, we will continue to assess all mortgage applications on affordability.”