Rental income supplements PAYE for half of Landlords

by Property 118

9:04 AM, 3rd July 2019
About 5 months ago

Rental income supplements PAYE for half of Landlords

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Rental income supplements PAYE for half of Landlords

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.

Full details of Precise Mortgages’ top slicing feature are available at precisemortgages.co.uk. Brokers can access the online calculator at precisemortgages.co.uk/Misc/BTLCalculator

* 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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Comments

Howard Reuben CeMap CeRER

15:20 PM, 7th July 2019
About 5 months ago

Top slicing is a fabulous 'secret' feature that most borrowers are unaware of.
In fact, I would suggest that most traditional brokers don't know about it either, which then hinders their Clients aspirations and requirements because the option is not being offered.
Specialist Brokers, such as H D Consultants, present top slicing as a solution when required.
However, the top slicing eligibility is not quite as easy to obtain as the article above implies. If the borrower's credit score is insufficient to qualify, then it will not be available and the standard ICR calculation will apply instead.
Recent experience with new Clients and their applications has confirmed this to be true.
A specialist Broker will offer, up front, the (truly) maximum borrowing amount based on ICR Top Slicing equations and this has proven to be substantially more than what is currently being offered on the standard rental income calculations.
For specific quotes and personalised options, click on my profile link and send me your enquiry.


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