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BM Solutions announces top slicing on buy-to-lets

Journalist: Newspage News desk, Freelance

ended 07. September 2023

Today, BM Solutions has announced the launch of top slicing on buy-to-let applications. Details in screengrab below. Free UK news agency, Newspage, asked brokers if this is a lifeline for many landlords struggling to remortgage or whether the criteria are too restrictive to make an impact. Their views are below.

 

9 responses from the Newspage community

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Richard Campo
Founder at Rose Capital Partners
I think this delivers a hugely positive message to the much beaten up buy-to-let market. From looking at the criteria, there are quite tight parameters and it clearly favors higher earners, but if you do tick the right boxes that can mean a 16% increase on the loan you could have got with BM Solutions previously. So while niche, any help to the Buy To Let sector should be welcomed. It is restrictive criteria such as the stress tests (among many other issues) that have put off a lot of landlords and resulted in a lack of suitable rental property and record high rental incomes being charged. So while this isn't a game changer, it is a step in the right direction and BM Solutions could be applauded for it.
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Riz Malik
Independent Financial Adviser at R3 Wealth
BM Solutions should be commended for broadening their criteria to aid more buy-to-let borrowers. However, with a minimum income requirement of £100k per application, it seems that wealthier borrowers with a few properties stand to gain the most, benefiting from the reduced cost of funds that BM Solutions, being part of the Lloyds Banking Group, can offer. Top slicing can indeed be a game-changer in buy-to-let applications, especially considering the current stress tests.
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Justin Moy
Managing Director at EHF Mortgages
Yet another improvement for landlords. It must feel a bit like Christmas at the moment. Importantly, this move by BM Solutions gives landlords some more options for those struggling with low rental income and higher interest rates. The use of personal income to boost affordability is not original, but when one of the largest BTL lenders in the UK makes a move like this, others will need to follow.
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Ranald Mitchell
Director at Charwin Mortgages
Top slicing is not new. This is an indicator that BM Solutions is struggling to lend in the current climate and making necessary changes. The criteria shift, though, is ultra-selective and will only benefit landlords with fewer than four properties. They will need to broaden criteria and innovate a lot further than this to help struggling landlords.
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Craig Fish
Director at Lodestone Mortgages & Protection
This is great news for the Buy to Let market and a sign that lenders are trying to do more to assist the landlord. Sadly though it doesn't help portfolio landlords, those with 4 or more properties, and as clients need to earn at least £100k to be able to benefit, there will still be many who won't be helped by this. Nevertheless, it's a step in the right direction. Now we need lenders to reduce their stress tests.
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Elliott Culley
Director at Switch Mortgage Finance
It's great to see BM move into the top-slicing market, however with a £100k minimum income criteria, as well as not being available to portfolio landlords, the pool of clients this will be available to is small. Hopefully, this will prompt other buy-to-let lenders to enter the market to help landlords further.
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Jamie Lennox
Director at Dimora Mortgages
Although it is great to see BM Solutions adapting to the changing market, the criteria seem too restrictive and they are only interested in taking on the cream of the crop. This still leaves many landlords up the creak without a paddle. Fingers crossed the criteria will evolve as time passes, which will open up more options to a wider audience.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
This is truly fantastic news for borrowers who find themselves in this income bracket. Many of these individuals have likely felt the weight of stringent stress testing, particularly considering their higher tax rate bracket. Consequently, the emergence of another lender offering top-slicing is nothing short of a boost for them. What's particularly encouraging is that this option is even though a minimum income of £1000,000 is needed, this income threshold can be met by combining the earnings of the first two borrowers. It's worth contemplating that this minimum income requirement could potentially be lowered in the future, making it even more competitive with other lenders who have already embraced similar approaches. With any luck, we could witness a growing number of lenders embracing top-slicing in the near future, offering borrowers greater financial flexibility and peace of mind for existing landlords who have deals ending soon.
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Charles Breen
Founder at Montgomery Financial
I think it is a step in the right direction, Their criteria definitely are on the restrictive side but this is hopefully the start of buy to let lenders become more flexible with criteria and open up to conversations on affordability for landlords. Open-minded thinking like this is needed a lot more in the buy to let the market