Castle Trust is the latest lender to announce its new portfolio landlord lending approach, ahead of the Prudential Regulation Authority’s (PRA) underwriting standards that will come into effect from 30 September.
From this date, Castle Trust will require brokers to complete a new portfolio landlord statement for clients who own four or more mortgaged properties.
The new portfolio landlord statement will include the following: an asset liability statement, a property schedule and a business plan.
Castle Trust’s underwriters will then apply a stress test to assess the position of the entire portfolio. In a statement, the lender explained: “Where there is a shortfall, we will take a view depending on how many properties this affects, the strength of the portfolio and the broader financial circumstances of the applicant.”
The stress tests that Castle Trust will apply are as follows:
Holiday lets are subject to a 150% stress test at the relevant pay rate.
Matthew Wyles, executive director at Castle Trust group said:
“The PRA’s requirement for underwriters to take a proportionate approach to portfolio landlords, based on their knowledge of the borrower, is simply an articulation of sound commercial lending.
“Castle Trust has always specialised in larger, more complex buy to let portfolios and so the provisions of SS13/16 are just business as usual for us.
“This said, it is important that we are clear and transparent with the market and so, by laying out our approach and the portfolio rental calculations that we use, we can eliminate any element of doubt.”
Further information regarding Castle Trust’s lending criteria can be found on its website.
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