New rules for buy to let rental stress testing

You may, or may not, be aware that the Prudential Regulation Authority (PRA) has been considering changes to buy to let rental stress testing recently, affecting buy to let mortgages across the UK.

Responsible for the prudential regulation and supervision of lenders, the PRA have now proposed that banks should be operating a standard stress for every case, which could be a minimum of 5.5% at 125%, or perhaps even higher.

This is yet to be set in stone, however could prove unfortunate for some landlords and properties in London, as the average rental yield currently stands at 3-4%. This means clients with either a 70% or 75% loan to value (LTV) property are likely to struggle more when it comes to remortgaging.

If landlords wish to release equity in order to further fund buy to let properties, they will have to do so quickly or risk fending for themselves later on. The market has consequently witnessed increased levels of remortgages across London, especially from those with buy to let portfolios.

Remortgaging to release equity is one of the best moves you can make in the current climate and something we can help you with. Many lenders have equally been offering enhanced service in this space as a result.

Precise Mortgages, a lender we have an excellent relationship with, is currently offering ‘pay rate’ deals on lifetime trackers and 5 or 10 year fixed products, now starting from 3.67%. This means the stress test becomes 3.67% at 125%, providing much greater scope for releasing maximum equity – as long as the client has a track record of at least 1 or more buy to lets.

Equally, Kent Reliance is offering a 2 year discounted variable rate aimed exclusively at limited company buy to lets. Available up to 65% LTV with no early repayment charges (ERCs), Kent Reliance is currently using a rental calculation of 3.59% at 125% for this product, compared to many lenders previously raised rental calculation of 5.5% at 125%.

The buy to let space has certainly proved the chameleon of the mortgage market, witnessing more changes than most. However, there are still many beneficial deals available when sourced in the right way.

With many using uncertainty in the market as a reason to hold-off on taking any action with their mortgage, we would wholly recommend remortgaging now and reaping the benefits of a more beneficial rate – especially with these potential buy to let changes pending.
If you have any questions on this article, or the buy to let market in general, please do not hesitate to contact us. Our experts are on hand anytime to assist you.

Blog from Enness Private: Blog in full here.

Enness Private

We arrange large mortgages secured against international property for global individuals.

You May Also Enjoy

Home and Living

Best Budget Smartphones Under $200

In the rapidly advancing digital era, it’s no longer a luxury but a necessity to have a smartphone. Not everyone however needs or is able to pay hundreds of dollars for an expensive device. The good news is that there are numerous budget smartphones under $200 that provide great performance, decent cameras, and a long…
Read More
Rightmove logo
Breaking News

Ten years on: More first-time buyers moving to cities while the coast stands still

New ten-year analysis of the property market shows that more first-time buyers are looking to move to cities, while the coast has seen no growth in new buyers First-time buyer demand to move to Great Britain’s 50 largest cities (excluding London) is up by 16% on average over the last ten years, with Dundee topping…
Read More
Breaking News

Homeowners in England and Wales overvalue their properties by an average of 16%

Homeowners in England and Wales are overestimating the value of their property by an average of 16%, according to new figures. Data from Quick Move Now compares homeowner estimates with formal estate agent valuations and is broken down by both region and property type. Overall, homeowners overvalue in every single category.   Regional breakdown Region…
Read More
Visual blemishes on Roads due to service upgrades
Estate Agent Talk

Emergency Sidewalk Repairs: When to Act and Who to Call

Sidewalks are the unsung heroes of city infrastructure—quietly assisting tens of millions of footsteps every day. But when they crack, disintegrate, or shift all of sudden, they might quickly turn out to be volatile liabilities. In a town like New York, in which pedestrian site visitors are constant and belongings proprietors are legally chargeable for…
Read More
Breaking News

Reapit report reveals agents’ long-term market confidence amid legislative challenges

Despite the significant challenges posed by a shifting economic landscape and the largest wave of housing legislation in decades, estate and letting agents remain steadfast in their confidence about their long-term future in the industry. According to the first Reapit Property Outlook Report 2025, covering the full breadth of sales and lettings agency opinion countrywide,…
Read More
Breaking News

Owner-Occupiers Drive Resilient Commercial Property Market

Buying Becomes 37% Cheaper Than Renting The latest Commercial Property Demand Index from specialist property finance expert, Rangewell, reveals that while investor appetite across the sector held steady in Q2, strong levels of owner-occupied commercial mortgage activity are helping drive market performance, as business owners increasingly move from renting to buying their long-term premises for…
Read More