{"id":799,"date":"2023-06-19T15:24:00","date_gmt":"2023-06-19T14:24:00","guid":{"rendered":"https:\/\/www.kinnison.finance\/?p=799"},"modified":"2023-06-20T07:18:40","modified_gmt":"2023-06-20T06:18:40","slug":"for-landlords-icr-will-be-a-challenge","status":"publish","type":"post","link":"https:\/\/www.kinnison.finance\/for-landlords-icr-will-be-a-challenge\/","title":{"rendered":"For landlords, ICR will be a challenge, but some lenders are showing flexibility"},"content":{"rendered":"\n<p><strong><strong>Whether you have a single buy to let (BTL) or are a portfolio landlord, if you are considering a new purchase or refinancing an existing BTL mortgage, then each lenders\u2019 Interest Coverage Ratio (ICR) requirements\/policies will be crucial to your success. <\/strong><\/strong><\/p>\n\n\n\n<p>In the current times of high interest rates, lenders have set challenging ICRs and many landlords may struggle to secure the finance that they need.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2><br>What is ICR?<\/h2>\n\n\n\n<p>As part of the mortgage approval process, lenders need to understand the borrower\u2019s affordability. For BTL mortgages, affordability is typically assessed by looking at the ICR. Most lenders apply a formulaic approach which takes into consideration gross rental income, borrowers\u2019 income tax bracket, monthly mortgage payments (including a potential increase in interest rates) and property maintenance costs.<\/p>\n\n\n\n<p>Each lender will have their own ICR requirements\/policies depending on:<\/p>\n\n\n\n<ul><li>Type of landlord \u2013 eg portfolio\/professional or \u2018accidental\u2019<\/li><li>Landlord\u2019s financial circumstances and other sources of income<\/li><li>Property type \u2013 HMO, holiday let, student etc<\/li><\/ul>\n\n\n\n<p>A portfolio landlord is&nbsp;a borrower with four or more distinct mortgaged BTL rental properties.<br>&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h2>Improved lender flexibility<\/h2>\n\n\n\n<p>Over the past few weeks, we have seen interest rates rise significantly and consequently landlords have found it challenging to secure their desired level of mortgage finance. <\/p>\n\n\n\n<p>To assist landlords, some lenders have reacted by introducing new initiatives and more flexible products:<\/p>\n\n\n\n<ul><li>Use of landlord\u2019s excess non-rental income to support affordability criteria and therefore higher LTVs &#8211; \u2018top slicing\u2019;<\/li><li>Lower interest rates (and hence lower ICR) on mortgage products with higher arrangement fees;<\/li><li>A blended lower ICR where property is jointly owned.<\/li><\/ul>\n\n\n\n<p>Given the current economic climate, significantly increasing rent may not always be an option for landlords and hence approaching flexible lenders could provide the help needed.<\/p>\n\n\n\n<p>In these times of uncertainty, we recommend that you\/your clients review current residential BTL mortgage arrangements.<br><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<h2><br>Get in touch<\/h2>\n\n\n\n<p>If you wish to discuss your\/your client\u2019s personal circumstances with a member of our team, please call us at +44 (0)20 3871 2823 or email at <a href=\"mailto:info@kinnison.finance\">info@kinnison.finance<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Whether you have a single buy to let (BTL) or are a portfolio landlord, if you are considering a new purchase or refinancing an existing BTL mortgage, then each lenders\u2019 Interest Coverage Ratio (ICR) requirements\/policies will be crucial to your success. In the current times of high interest rates, lenders have set challenging ICRs and&#8230;<\/p>\n<p><a class=\"excerpt-read-more btn btn-primary\" href=\"https:\/\/www.kinnison.finance\/for-landlords-icr-will-be-a-challenge\/\" title=\"ReadFor landlords, ICR will be a challenge, but some lenders are showing flexibility\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":777,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1,20],"tags":[21,26,25,24],"_links":{"self":[{"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/posts\/799"}],"collection":[{"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/comments?post=799"}],"version-history":[{"count":5,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/posts\/799\/revisions"}],"predecessor-version":[{"id":804,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/posts\/799\/revisions\/804"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/media\/777"}],"wp:attachment":[{"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/media?parent=799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/categories?post=799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kinnison.finance\/wp-json\/wp\/v2\/tags?post=799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}