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New research* for specialist lender** Precise Mortgages, shows 52% of landlords use letting income to boost earnings from a full-time job. The findings highlight the need for lenders to offer top slicing to help more customers achieve greater flexibility on buy to let products and loan size.
The study found that even among landlords with bigger portfolios many are still working full-time and have other earnings beyond letting income. Around 32% of those with 11 to 19 properties say letting income supplements day job earnings while 18% of those with 20-plus properties have other income in addition to rental earnings.
Precise Mortgages has enhanced its top slicing feature, which enables customers to use surplus portfolio or earned disposable income to prove they can meet any financial stresses on a new loan application rather than through the rental income of the property alone.
It is now accepting top slicing on all eligible personal ownership, limited company, portfolio, HMO, and holiday and student let applications. First-time buyers are excluded.
Across the market as a whole 33% landlords earn their living purely from their property portfolios, rising to 47% among those with six to 10 properties. Around 16% landlords plan to add more properties in the year ahead with 71% funding purchases with a buy to let mortgage.
Alan Cleary, Managing Director of Precise Mortgages, said:
“Given that the majority of landlords have other earnings that can be used to show they can meet underwriting standards, lenders need to reflect this in their product offering to support landlords accordingly.
“Top slicing allows landlords to manage their properties in a way they choose and gives them greater access to the products and loan sizes they want and particularly for those who may have been restricted by ICR requirements in the past.”
Precise Mortgages’ top slicing feature can help brokers and their customers to access its range of 2-year Fixed rate buy to let mortgages as well as its 5-year Fixed rate products. The specialist lender has also streamlined the application process and enhanced its online buy to let calculator.
* BVA BDRC Q1 2019 Landlords Panel syndicated research report prepared for Precise Mortgages. Fieldwork was conducted online between 15th and 26th March among a sample of 829 National Landlords Association members
** Source: BVA BDRC Project Mercury Report Q4 2018
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