Gatehouse Bank has reintroduced top slicing for UK residents purchasing a buy-to-let property.
Top slicing, sometimes referred to as income top-up, can be used where the rent paid by the tenant does not exceed the monthly payment charged by the Bank by the required amount.
In these cases, subject to certain limits, the applicant’s personal income can be used to ‘top-up’ the shortfall.
Gatehouse Bank has also streamlined its Finance Service Coverage Ratio (FSCR) bandings. For limited companies and basic rate taxpayers purchasing individual buy-to-let properties or as part of a portfolio, a 125% rate will apply.
A 145% rate will apply for higher and additional rate taxpayers purchasing a property individually or as part of a portfolio, and anyone purchasing a House in Multiple Occupation (HMO) or Multi-Unit Freehold Block (MUFB).
To qualify for top slicing, a minimum annual income of £32,000 from at least one UK-based applicant is required and the FSCR bandings of 110% for limited companies and 115% for individuals will be implemented.
FSCR Bandings
| FSCR | UK | ||
| buy-to-let | buy-to-let Portfolio | HMO/MUFB | |
| Income Top Up Individual | 115% | 115% | Not applicable |
| Income Top Up Ltd Co | 110% | 110% | Not applicable |
| Ltd Co | 125% | 125% | 145% |
| Basic Taxpayer | 125% | 125% | 145% |
| Higher Rate Tax Payer | 145% | 145% | 145% |
| Additional Rate Tax Payer | 145% | 145% | 145% |
| Non-UK Tax Payer | 130% | 130% | 145% |
John Mace, senior product manager at Gatehouse Bank, said: “We continuously review our products and criteria to ensure that we are providing our customers with the most suitable outcomes for their needs.
“We have reintroduced top slicing to broaden our criteria and subsequently help more buy-to-let customers achieve their financial goals.”
