"We're still a distance away from the stress calculations that many landlords require to refinance their current buy-to-let borrowing"
Following Santander increasing its buy-to-let stress rates on Friday, NatWest has today revised its stress rates downwards.
Two-year fixed rate stress rates are decreasing from 8.6% to 8.15%, five-year fixes from 7% to 6.78%, and like-for-like remortgages from 8.21% to 7.55%.
News agency, Newspage, asked brokers what implications this has for landlords and why NatWest is taking a different path from Santander.
Elliott Culley, director at Switch Mortgage Finance, said: "Although it's positive to see any reductions in stress testing by lenders, this move is nothing revolutionary. NatWest's stress test was very high so this move is more an indication that they weren't getting any buy-to-let mortgage business through the door. By reducing it they will hope to have some more applications, but the market remains tough for landlords."
Riz Malik, founder and director at R3 Mortgages, commented: "Last week, Santander looked like they were "closing shop" on buy-to-let, but today, NatWest have their "open for business" sign brightly lit. Nonetheless, we're still a distance away from the stress calculations that many landlords require to refinance their current buy-to-let borrowing, particularly in London and the south-east. The climate for landlords remains brutal."
Scott Taylor-Barr, financial adviser at Barnsdale Financial Management, added: "Given that we are now seeing interest rates falling back, it makes sense to see the ICR calculations being revised downwards, too. Santander's move to further increase them felt odd and perhaps speaks more to their strategy in terms of business mix than anything else. NatWest has decided that they want to attract more buy-to-let business and have taken steps to make that happen."
