Sunday 22 May 2016 11:26 pm

Barclays tightens buy-to-let properties lending rules

Barclays is to tighten rules on lending for buy-to-let properties, increasing minimum rental covers.

The decision to tighten lending criteria means that rental payment must exceed mortgage costs by a factor of 145 per cent, up from 135 per cent.

The affordability rate will also be reduced from 5.79 per cent to 5.50 per cent.

The changes come into effect from 26 May.

A spokeswoman said: "As a responsible lender, Barclays Mortgages wants to ensure that aspiring landlords can continue to meet all their financial commitments and are protected as they look to invest in buy-to-let over the long term."

In late March, the Bank of England revealed plans to clamp down on buy-to-let, setting out strict new rules for banks.

This included asking lenders to consider borrowers’ non-rental incomes, as well as whether they would be able to cope with future interest rates of up to 5.5 per cent.