Lenders tell Buy-To-Let landlords they are not allowed to house tenants claiming benefits.
UK private rental sector (PRS) landlords with buy-to-let mortgages are being prevented by their mortgage lenders from letting rental properties to tenants claiming benefits.
BM Solutions, the buy-to-let brand of the Lloyds Banking Group, is one lender, and Accord, a Yorkshire Building Society brand, is another, who have placed the ridiculous restrictions on their BTL mortgage products.
A spokesman for Finance4Landlords.com said: “It seems interesting that the Government, who have an interest in getting vulnerable people housed in the UK private rented sector, have not been restrictive over this issue before, especially as one of the biggest lenders is a bank part owned by the state. The most interesting thing about this is that from all the work we have done in this area, we have seen no statistical evidence to suggest that landlords who let to tenants on benefits are any more likely to default on their mortgages than landlords who avoid such tenants. If anything we have seen more landlords signing up for Rent Guarantee Insurance”
Chris Maggs, Accord’s national Buy-To-Let account manager said: “We do not currently lend to 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. Our range of mortgages and lending policy is continually evolving and we would not rule out changes in the future to satisfy requirements of the private rental sector, provided applicants meet our fundamental requirements of being experienced buy-to-let borrowers with a good financial track record.”
A spokeswoman for BM Solutions, said: “Through our buy-to-let criteria, we are actively managing the risk profile of this type of 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.”