"With higher stress testing, it will rule out a large number of landlords being able to access them as a lender."
NatWest has announced that it is increasing its buy-to-let stress rates from today.
Two-year fixed stress rates have risen from 6.7% to 8.10%, five-year rates have increased from 6% to 6.89%, and like-for-like remortgage stress rates have increased from 6% to 7.54%.
Yesterday NatWest announced increases of up to 157bps across its buy-to-let mortgage range.
Brokers responded to the news, with Gareth Davies, director at South Coast Mortgage Services saying "it would be much better to tell us all that they simply aren't interested in buy-to-let right now".
Jamie Lennox, director at Dimora Mortgages, said: "These changes show very clearly that NatWest has a minimal appetite for the buy-to-let mortgage market at present. With higher stress testing, it will rule out a large number of landlords being able to access them as a lender. The question is, will there be other lenders who follow in their footsteps? If they do, we will see a mass sell-off from landlords who are struggling to obtain new mortgage deals."
Riz Malik, founder and director at R3 Mortgages, commented: "I do not see Natwest's share of the buy-to-let market increasing at these stress test levels. However, I am not sure how much of a buy-to-let market will be left if things continue at this rate."
Graham Cox, founder at SelfEmployedMortgageHub.com, said: "This is a huge hike in Natwest's stress test rates for buy-to-let mortgage applications. Clearly, it's a pre-emptive strike ahead of expected further increases in interest and mortgage rates. Fortunately, there are other lenders with far less onerous stress tests, well below 6%, though that could change at any time given the current market volatility."
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions, added: "It's increasingly apparent that NatWest has effectively curtailed its support for the buy-to-let sector, indicating a shift in focus towards its residential offerings. It also appears that the bank aims to ensure that service standards remain unaffected in the future."
