Definition of a portfolio landlord
An applicant who has 4 or more qualifying Buy to Let mortgaged properties, including:
• Properties owned in the name of a limited company where the applicant holds more than 25% of the shares
• Properties held on a consent to let basis
• Holiday lets
For joint applications, if the combined number of qualifying properties exceeds 3 then the application will be classed as portfolio lending.
Portfolio landlord specific criteria
The easiest way to check if your client’s portfolio is likely to be acceptable for lending purposes is to use our quick check calculator. This calculator considers the Interest Coverage Ratio (ICR) of the subject property individually and of the portfolio as a whole, the number of properties in the portfolio, the LTV of the portfolio, the level of experience of the applicant(s) and the rate at which the portfolio has grown. Our criteria for this is:
- The ICR of the subject property and the portfolio as a whole must be at least 145% when calculating the monthly payment at a reference rate of 5.5%
- The maximum number of qualifying properties to be held in a portfolio is 10
- No applicants must have acquired more than 3 BTL properties in the last 12 months
- At least one applicant must have a minimum of 24 months’ experience as a landlord
- The maximum LTV of the portfolio of qualifying properties, including the subject property and any unencumbered properties, is 70%
- The applicant’s age must not usually exceed 80 at the end of the mortgage term
Please note that in addition to the general and portfolio landlord-specific criteria, each case will be assessed individually by our portfolio underwriting team whose checks will include consideration as to whether there is any over reliance on background properties with energy performance ratings below the minimum regulatory requirements, to deliver overall affordability. Whilst we accept a combination of rental income and personal income for non-portfolio landlords (commonly known as top-slicing), this is not true for portfolio landlords.
All of our standard products are also available to portfolio landlords.
Submitting an application
The application process and supporting documentation requirements for portfolio landlords are the same as for non-portfolio applications. Details of the background properties are requested on the application form – please ensure that you capture in readiness for both mortgaged and unencumbered properties the names of the account holders, property address, rental income and monthly mortgage payment (if any), current lender and account number, balance outstanding (if any), mortgage repayment basis, current property value and EPC rating.