Santander to introduce two-tiered B2L affordability tests


Santander is introducing a new two-tier buy-to-let affordability calculation as the Government’s tax shake up is expected to increase costs for landlords.

From 21 February, the affordability rate for loans up to and including 60 per cent LTV will remain at 5 per cent.

For loans over 60 per cent LTV, the existing 5 per cent affordability rate will increase to 5.5 per cent.

A spokeswoman says: “This change reflects our continued prudent approach to lending and affordability and is in line with current market conditions.

“The buy-to-let market is undergoing significant change with the additional 3 per cent stamp duty on second home purchases from 1 April, and the phased reduction in tax relief starting next year adding to the cost of being a landlord. As a result landlords will be reviewing their business models and lenders will also be reviewing their rental cover calculations to ensure affordability assessments keep pace with the change.

“Buy-to-let continues to be a strong market and key priority for us as we look to grow our buy-to-let business. Our competitive buy-to-let rates combined with our quick time to offer mean that we are well placed to help customers keen to invest in property.”