Nationwide’s Critical Update for Landlord Customers: What You Need to Know
The Mortgage Works, a subsidiary of Nationwide, is implementing significant changes to enhance support for landlords looking to expand their portfolios. This announcement, made on Wednesday, 29 October, introduces several key updates aimed at easing financial constraints for landlords.
Key Enhancements for Landlords
The Mortgage Works is raising the maximum loan limits for various types of landlord applications:
- Buy to let and limited company applications: Increased from £1.5 million to £2 million.
- Let to buy applications: Increased from £500,000 to £1 million.
- Maximum overall borrowing: Increased to £7.5 million.
These changes reflect The Mortgage Works’ commitment to facilitating larger investments for landlords, thereby enabling them to grow their portfolios effectively.
Affordability Assessments
As part of the new strategy, The Mortgage Works will evaluate properties within each landlord’s existing portfolio. This assessment will focus on the Interest Coverage Ratio (ICR) and Loan-to-Value (LTV) ratios to ensure they remain sustainable.
Expert Insights
Dan Clinton, Head of Buy to Let Mortgages at The Mortgage Works, emphasized the importance of these changes. He stated, “This is the latest in a series of enhancements we’re making to our landlord offering.” Clinton noted that feedback from brokers indicated a necessity for these adjustments, which the organization has now addressed.
In addition, the current background ICR policy of 145% will be refined. A new rate of 125% will be applied to properties owned under a Limited Company structure. This strategic decision aims to reflect current market practices and enhance the reliability of investment scenarios.
Industry Perspectives
Nick Mendes, Mortgage Technical Manager at John Charcol, remarked on the implications of these changes for professional landlords. He noted that increased loan sizes and modifications to the aggregate portfolio policy demonstrate strong support for experienced investors. Higher caps afford landlords greater flexibility for funding and refinancing.
Mendes added that the adjustments signal a commitment to aligning affordability with practical portfolio management, supporting the evolving landscape of the buy-to-let market.
