NatWest has announced that it will remove its restrictions on buy-to-let landlords.
The restrictions prevented BTL landlords from extending their mortgage if a tenant was in receipt of housing benefits, which was the subject of some debate in October 2018.
The decision comes after it reviewed its BTL polices, in which it looked at the challenges landlords and tenants face, according to the lender. It adds that it worked with Shelter and the Residential Landlords Association during this process.
In addition, the bank has extended its assured shorthold tenancy from one- to three years.
NatWest managing director of home buying and ownership Ian McLaughlin comments: “I am pleased that we are introducing these changes and extending our policy to support smaller landlords in this segment of the market.
Residential Landlords Association policy manager John Stewart adds: “We warmly welcome today’s announcement from NatWest.
“Around 20 per cent of all private sector tenants are in receipt of benefits and we need to do all we can to support them to find the homes they need.”
Mortgage Strategy approached some industry figures to ascertain their take on this latest move by Natwest.
Coreco director Andrew Montlake says: “This is good news for many and will provide another useful option for those renting to tenants receiving benefits. We need to continue to remove the stigma often associated with certain situations, whether it is tenants receiving benefits or, for example, lending on ex-local authority properties.”
Bespoke Finance founder Adam Hosker comments: “While the tenure is a higher risk, it is an unsightly criteria condition. NatWest has made the right decision, while they are in the spotlight on this, others have silently changed. We would expect further movement following recent government intervention.”
Meanwhile, L&C associate director David Hollingworth is also positive. He says: “Natwest’s review of its policy is a welcome and progressive move, showing it is prepared to listen and overhaul its approach where warranted.
“Opening up options for landlords letting to tenants in receipt of benefit should help to improve the range of properties available to those tenants.
“The shift to accepting longer term tenancies is also a positive move which will enable more landlords to offer longer term security to those tenants that want it.
“Hopefully these changes will encourage more lenders to think about where their policy could be more expansive, to help meet the changing needs of tenants and landlords in the private rented sector.”