Following on from Shawbrook’s recent criteria update, they have had to make some further adjustments to their lending criteria. These changes reflect risk appetite adjustments in the current market, however, they will continue to review these changes as they remain committed to lending to your customers. These changes include:
Valuations:
Demand for Letting:
| Rental Demand Timescales | LTV – Please note |
| 0-3 months | Maximum 75% LTV Interest Only (unless stated differently by asset type) |
| 3-6 months | UW to consider the case and reduce the LTV by 5% to 70% |
| 6+ months | UW to give further consideration to the case and in most circumstances decline the deal |
Outside Income: This is no longer acceptable to support an Application in England & Wales.
Portfolio Assessment: Outside portfolio will now be stressed at 8.5% with 100% cover required. The E-tech portfolio system has been updated to apply this new stress rate.
Bridging
Exit to term: When Exit is to term they will apply a 7% repayment rate to accommodate any potential interest rate rises during the term of the loan.
85% LFC product: The Deposit (minimum 15%) must come from the Client’s own cash resources for which they will require proof.
Development Finance Exit: They will need to see a contract of sale or exchange for properties within the site. They will also be applying the revised letting criteria as highlighted above
Scotland Lending – New Legislation
Capped Rents: Rising interest rates for mortgage products are being partially offset by rental growth in the current market. However, this is removed in Scotland whilst rents are capped. If the current period is extended, landlords may find passing rent no longer meets debt servicing requirements for a new product at a higher interest rate. They will consider outside sources of income for borrowers who are able to feasibly meet mortgage payments in the event of a longer 3-month void period.
These changes will be reflected on their website shortly. In the meantime, please use the buttons below to access the updated lending criteria:
| Download Buy-to-Let Criteria |
| Download Commercial Criteria |
| Download Bridging Criteria |
If you require support or further information, please do not hesitate to contact them. Their fantastic team are here to help you where needed.