Lenders Refuse Landlords with Benefit Tenants

The YBS mortgage service, Accord, has revealed that it did not lend to landlords with tenants in receipt of benefits after questioning by the landlord and buy-to-let consultant David Lawrenson.

The terms and conditions of the BM Solutions mortgage policy similarly did not enable borrowers to let their property to tenants claiming housing benefit, although it is currently reviewing its policies.

Accord Mortgages National Account Manager for buy-to-let Chris Maggs said: “We do not currently lend to landlords with 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.”

He added that the lending policy could change in future in order to satisfy the requirements of the private rental sector, providing applicants were experienced buy-to-let borrowers with a good financial track record.

A Lloyds Banking Group spokesman said BM Solutions used the buy-to-let criteria to manage the risk profile of its 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.”

Lawrenson said his investigation should be interesting to anyone associated with mortgages or the rental sector: “I would imagine few in government especially in local government are aware of this. It is just an observation which shows the disconnect between the government and this area of the housing market.”

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