With lenders soon having to undertake specialist affordability testing on clients with four or more mortgaged buy to lets, OneSavings Bank has announced details of how it intends to meet the requirements.
The banking group, which includes specialist lenders Kent Reliance and InterBay Commercial, will now require additional information from clients that meet the PRA's definition of a portfolio landlord. This will include business plans, statements of assets and liabilities and cash flow statements. Borrowers will also need to provide details of their property portfolios, which will then be tested for affordability using an interest cover ratio (ICR) of 125% stressed against a 5% notional interest rate.
When submitting portfolio information, brokers will be able to make use of OSB's new Buy to Let Hub, announced at the end of July and developed in partnership with property risk software developer eTech. The platform, designed with input from Mortgages for Business, will allow brokers to upload portfolio details both directly and via Excel. Importantly, the software will be capable of updating a repeat borrower's portfolio record without the broker having to spend vast amounts of time re-keying information.
OneSavings Bank sales director Adrian Moloney said:
"OSB will keep things simple for brokers. We've always welcomed portfolio landlords and the changes here cement our position as the lender of choice for these borrowers. We've chosen to announce our criteria well ahead of the October deadline, to help brokers prepare for the changes in good time so they can feel confident when preparing clients to submit a portfolio application. Together with the new Buy to Let Hub, we're doing all we can to transition brokers and their clients into the new landscape with the minimum of fuss."
You may also be interested in:
Skipton tightens affordability tests for portfolio landlords
How Skipton Building Society's criteria is changing for portfolio landlords.
How Aldermore will underwrite portfolio landlords
As of 1st October 2017 lenders will need to implement a more thorough underwriting process when considering mortgage applications from portfolio landlords, i.e. where the borrower has, or will have more than four mortgaged residential buy to let properties.
The Mortgage Works & Paragon break silence on lending to portfolio landlords
Chris Longhurst describes how these lenders will meet new PRA requirements
Accord prepares for PRA changes while Leeds and Yorkshire cut mortgage rates
Ahead of the PRA's new underwriting standards, which come into effect in September, Accord has announced the details of its new lending criteria for portfolio landlords