PRA Changes – Portfolio Landlords
Changes for “Portfolio Landlords”
The second tranche of rules from the Bank of England (BoE) went live on the 30th September 2017 and surrounded “Portfolio Landlords”. Most imagine this type of landlord has tens of properties, but the Prudential Regulation Authority (PRA) has set the benchmark at a low level, so if you’re a landlord with just four or more buy to let properties this change now impacts your ability to borrow – in short, you now undergo a stricter level of underwriting looking at the ‘performance’ of your current portfolio as well as the singular property you are financing.
Background Portfolio Performance
If you’re a current landlord you’ll be aware that historically, buy to let lenders would largely ignore your background buy to let portfolio assuming a self-financing situation and concentrate their underwriting efforts purely on the one purchase or remortgage you were undertaking.
A portfolio landlord is defined as having just four or more buy to lets
So historically lenders didn’t scrutinise your overall position, however, lenders must now place a much greater emphasis on ensuring your portfolio is performing sufficiently to warrant lending further monies to you. It’s now not uncommon for lenders to need a full breakdown of your portfolio including collecting accurate data on your property values, rental income, costs and mortgages, as well as understanding any other assets and liabilities and validating your property income. Business plans are also often required.
How Can The Buy to Let Broker Help?
Well, the first piece of guidance we can give you – please don’t assume you can’t expand your portfolio or remortgage for a new rate!
Having said that, it’s never been truer that the input of a specialist broker is needed, and lucky for you we have decades of combined experience which means your portfolio is in expert hands.
The first thing we can do is have a look at your full portfolio and identify any potential issues to mitigate them ahead of time, as well as identify any potential ways to save. Not only that, as a specialist mortgage broker we’re able to discuss your application directly with the real decision-makers to avoid common criteria pitfalls or unnecessary delays.
The mortgage market is ever-changing but we really do know lender criteria inside and out so one thing is for certain, despite the complexity that portfolios can bring, lenders are still willing to lend and The Buy to Let Broker is well placed to help you secure the funding you need.
Chat To A Buy to Let Broker
If you are looking to expand your property portfolio further, get in touch to get the latest options for your mortgage. You can call us on 08009499410 right now or complete the contact form below.
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