Affordability calculation
General Discussion

__chris__
__chris__
32 Thanks
80 Posts
4 years ago
0

A long time ago, when I used to work for a building society, we used to have a formula to decide whether loan repayments would be affordable even if interest rates increased.

For renting though, there doesn't seem to be a consensus position. For example, RentRight use a rule of £30000 of income per £1000 of monthly rent, which appears a blunt instrument at best. Other examples look through 3-6 months' bank statements and consider the net income after tax, loans, insurance and other commitments and state that around 35% of the residual income could be used for housing/rent purposes.

I spoke to one LL this week who doesn't do any diligence himself but gets it done via a 3rd party company as part of the referencing process.

What method do you use ?

Please Login

You must be logged in to participate in our forums, to continue please login below.

Not a member? From only £125 you can join in the discussion and get access to member's only resources and services.

As the home for landlords, the NRLA are here to help you save time, save money, and stay compliant. NRLA membership gives you access to a vast range of expertise, resources, and exclusive member benefits and savings, designed to help and empower members. We also play a pivotal role in campaigning and championing the interests of landlords.

Join Today

Have you forgotten your password?