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.”

Related Posts

Tag Box

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.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

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.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

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...

Money Tips of the Week