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Santander unveils BTL approach ahead of PRA changes

Santander has become the latest lender to unveil its approach to buy-to-let lending ahead of the forthcoming PRA underwriting changes.

The intermediary arm of the lender has written to partners to outline its plans and has said that it will offer BTL remortgages without capital raising to landlords with a maximum of five properties mortgaged with Santander.

Under the PRA’s new rules, those with four or more mortgaged let properties will be considered portfolio landlords.

Remortgages will be offered to those whose last BTL property was purchased before 1 January 2017.

It will not accept applications from portfolio landlords for purchase or remortgage for the purpose of capital raising.

The lender has also announced that it is adding a 4.5 per cent BTL affordability rate for five year fixes.

The new rate will apply to BTL and remortgage lending with capital raising, at a stress test of 145 per cent.

Porting applications won’t qualify for the 4.50 per cent affordability rate and 5.50 per cent will apply.

A spokesperson for the lender says: “We are committed to supporting the buy-to-let market. We have clarified  that we will continue to support portfolio landlords with their remortgaging with our pound-for-pound transitional policy after 1 October 2017 when the new PRA direction is released into the market.

“We will continue to review our position on portfolio landlords who wish to purchase additional properties or capital raise on existing properties.”

All changes will apply from Monday 24 July.

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