Brokers have raised concerns about The Mortgage Works not verifying the income of buy-to-let mortgage applicants.
TMW does not have a minimum income and does not carry out income checks. Instead, the firm looks at each property’s potential to pull in 125 per cent of the monthly mortgage repayment in rent.
The other main players in the buy-to-let sector, Paragon and BM Solutions, both require a minimum income of £25,000 before they will lend to a borrower. Paragon verifies income in every application and BM says it decides whether to check income on a “case by case basis”.
Nationwide for Intermediaries head of corporate accounts Paul Howard says: “We are comfortable with our approach, it has worked since 2002 and the mortgage book quality speaks for itself.”
Enness Private Clients partner Hugh Wade-Jones says: “You get people who, although they might be on decent money, have six or seven buy to lets. If two or three of those go empty at once, they are in trouble. A £25,000 salary is not going to support £750,000-worth of buy to lets.”
Buy To Let Funding Services principal Geoff Laird says: “For new applications, all lenders should take prudential means to check income.”