The high street bank’s broker-only arm says for buy-to-let properties it is “no longer going to capture details of the monthly running costs for the property. The affordability assessment will be based on the rental cover only.”  

This will see its BTL affordability rates change:  

• Standard affordability rate rises to 7.64% from 7.38%  
• Five-year fixed affordability rate falls to 5.64% from 5.88%  
• Remortgage affordability rate falls to 5.64% from 5.88%  

The lender says that its rental cover will rise to 145% where any applicant has an income tax band higher than 20%.   

The rental cover where all applicants have an income tax band of 20% or less will remain at 125%.  

Under residential changes, it adds that it will lift rental cover to 145% for let properties (already let or to be let) to work out if the retained property is self-financing.   

If the property is not self-financing, it will automatically consider the shortfall between the 145% figure and the rent when assessing the affordability of the new mortgage.  

The bank says all full mortgage applications submitted by 10pm on 8 June will be affected by these changes.  

But full mortgage applications submitted from 6am 10 June will be subject to the new lending policy.  

The bank will also ask new anti-money laundering questions about deposits for mortgage applications.  

Gifted deposits    

Where any part of the deposit is gifted, the following additional questions will be asked:  

• Occupation(s) of the person(s) providing the gift  
• How has the giftor(s) generated their funds?  

Applicant’s own savings  

Where any part of the deposit is from the applicant’s own savings, the following additional question will be asked:  

• How has the customer generated their funds?  

All full mortgage applications submitted by 10pm on 8 June will not be affected by these changes.  

But from 6am on 10 June, these new deposit questions will be asked on all submitted full mortgage applications.