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NatWest cuts buy-to-let stress rates - reaction from brokers

Journalist: Riz Malik

ended 29. August 2023

Following Santander increasing their stress rates on Friday, NatWest has today revised their stress rates downwards (rates below):

  • 2 year fixed: decrease from 8.6% to 8.15%.
  • 5 year fixed: decrease from 7% to 6.78%
  • Like for Like remortgages: 8.21% to 7.55%

Free UK news agency, Newspage, asked brokers what implications this has for landlords and why NatWest is taking a different path from Santander. Their views can be seen below. 

Publishers: if you use any, or all, of this content for publication, please credit Newspage.

6 responses from the Newspage community

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Elliott Culley
Director at Switch Mortgage Finance
Although it's positive to see any reductions in stress testing by lenders, this move is nothing revolutionary. NatWest's stress test was very high so this move is more an indication that they weren't getting any buy-to-let mortgage business through the door. By reducing it they will hope to have some more applications, but the market remains tough for landlords.
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Ashley Thomas
Director at Magni Finance
NatWest has taken a positive and common-sense approach to the stress test rates. This is what is needed to make it feasible for landlords to be able to remortgage. A step in the right direction.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Last week, Santander looked like they were "closing shop" on buy-to-let, but today, NatWest have their "open for business" sign brightly lit. Nonetheless, we're still a distance away from the stress calculations that many landlords require to refinance their current buy-to-let borrowing, particularly in London and the south-east. The climate for landlords remains brutal.
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Justin Moy
Managing Director at EHF Mortgages
This is a small improvement from NatWest, at a time when fellow competitors Santander have increased their affordability check rates. Both lenders are controlling volumes of business where there is not a significant amount of new buy-to-let lending, as the vast majority of borrowers are exercising Product Transfers with current lenders, and many smaller landlords are looking to sell. Those with larger portfolios will be working with specialist lenders who offer a different type of proposition, whereas High Street lenders will hopefully concentrate on bringing down the cost of residential borrowing over the coming months.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Given that we are now seeing interest rates falling back, it makes sense to see the ICR calculations being revised downwards, too. Santander's move to further increase them felt odd and perhaps speaks more to their strategy in terms of business mix than anything else. NatWest has decided that they want to attract more buy-to-let business and have taken steps to make that happen.
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Ben Tadd
Director at Lucra Mortgages
This is a step in the right direction but the stress tests remain very very high across the board in the buy-to-let market, meaning it is still a precarious position to be in for any landlords whose mortgage deals are due to end in the next 6-12 months. Until stress tests come down more significantly, the buy-to-let market will remain stagnant in the immediate future, with landlords being very restricted in terms of products they are eligible for.