You are here: Home - Mortgages - Buy To Let - News -

DWP landlords barred from borrowing

Written by:
Buy-to-let landlords whose tenants receive housing benefit are struggling to find mortgage finance.
DWP landlords barred from borrowing

The Yorkshire Building Society mortgage service Accord revealed it did not lend to landlords with tenants in receipt of benefits from the Department of Work and Pensions (DWP) after questioning by landlord and buy-to-let consultant David Lawrenson.

The terms and conditions of the BM Solutions mortgage policy similarly prevent borrowers letting their property to tenants claiming housing benefit, although it is currently reviewing its policies.

Accord Mortgages National Account Manager for buy to let Chris Maggs said: “We do not currently lend to landlords with DWP-assisted tenants or tenants in receipt of housing benefit.

“We are a relatively new entrant into the buy to let market and as a responsible lender have taken a cautious approach, with a focus on financially sound borrowers who already have some buy to let experience.”

The lending policy could change in future in order to satisfy the requirements of the private rental sector, providing applicants were experienced buy-to-let borrowers with a good financial track record, he added.

A Lloyds Banking Group spokesman said BM Solutions used the buy-to-let criteria to manage the risk profile of its lending: “Historically, this type of tenant has been of a higher risk, and this is reflected in our criteria. We are currently reviewing this aspect of our lending criteria, and will communicate the outcome of this review when appropriate.”

Lawrenson said his investigation should be interesting to anyone associated with mortgages or the rental sector: “I would imagine few in government especially in local government are aware of this. It is just an observation which shows the disconnect between the government and this area of the housing market.”

Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Faith in pensions in the balance

More changes to the tax relief on pensions could destroy public faith in saving for retirement.