Type of Buy to LetConsumer Buy to Let – this is when you have lived in the property as your main residence or you inherit a property that was a main residence and then due to a change in circumstances you choose to let the property and you receive no other rental income. Intermediaries must hold appropriate FCA permissions Regulated Buy to Let – this is when you or a member of your family will at some stage be a tenant (this also applies to Holiday Buy to let where you or a family member expect to rent the property at some stage) Business Buy to Let – this is where the transaction does not merit either of the criteria above and is purely a business transaction to generate income and yield
ICR CalculationThe Melton’s standard ICR (Interest Coverage Ratio) calculation is 145% of the mortgage payment, calculated at the Society’s BTL stressed rate of 5.5% on an interest only basis. This calculation is reduced to 130% for our Holiday Buy to Let and £ for £ Remortgage products.
Income RequirementsApplicants must have a minimum earned income amount of £25k. This can be shared between joint applicants. Evidence of income is in accordance with our standard proof of income requirements.
Portfolio & SecurityA maximum portfolio of 3 properties in total in mortgage to the Society or any other lender will be allowable to an individual or connected counterparty. The maximum amount that may be lent to any individual or connected counterparty is £500k in aggregate. The Society will not currently consider lending on leasehold properties. The EPC rating for the property must have a minimum of grade E.
Regulated Family Buy to LetMany landlords who are looking to buy a property to rent to a family member will know it’s not easy, however at The Melton we offer a Family Buy to Let mortgage allowing just that. This mortgage is also available to customers who are intending on letting the property out to non-related tenants in the short term but moving in themselves at a later date.
Family Assist for StudentsOur Family Assist for Students product allows parents to buy a property for their child to live in whilst attending higher education with the remaining rooms being let to other students or young professionals on a single AST. The ICR calculated will be based on the income derived from the remaining rooms, exclusive of the room occupied by the child. The property must be freehold, within a 15 mile radius of the higher education campus being attended and have a maximum of 3 bedrooms.
Holiday Buy to LetOur Holiday Buy to Let mortgages continue to remain popular, especially due to the fact that we offer a regulated product allowing the applicant(s) to holiday in the property themselves. Gross rental income must cover the mortgage payment (calculated at the the Society’s BTL stressed rate on an interest only basis) by a minimum of 130%. For the purpose of HBTL, gross rental income shall be;
- In the case of an existing holiday let (purchase or remortgage), a minimum of one year’s gross rental income verified by an approved accountant, or
- In the case of a new holiday let, confirmation of potential income and the % occupancy rate from a letting agent with relevant experience in the area of the property, taking 40% as a maximum occupancy rate or the letting agents figure, if lower