Banks Request Extra Cash from Wealthy BTL Landlords

As UK banks are taking dramatic steps to handle the market property downturn, they demand that wealthy borrowers pay off £1m of their mortgages by giving them a 1 month notice. London property consultants claim that they have evidence that some UK banks ask their wealthy borrowers with large property portfolios to come up with more cash as the property prices have fallen. For instance, NatWest sent just a one month’s notice to one of its clients with a £5m property portfolio to pay off £1m in order to compensate the loss in his property value despite the fact that the lender had no evidence that the borrower will default on the mortgage. The client’s consultant said that although the borrower has enough cash to pay for the mortgage, bank’s actions knocked the borrower back on his heels since the rental income significantly exceeds the interest in the mortgage. NatWest said its policy allows the bank to revise the conditions of the agreement in case they have evidence that borrower’s property rental income is not enough to service the loan. Although many brokers admit that they have come across a number of cases when banks demanded additional funds from wealthy borrowers, they say that this feature is new to the buy to let property market. In general, banks use hidden and little-known clauses to request extra funds from borrowers, so those who paid little attention to such clauses fall foul of the bank’s demands.