With PRA guidelines on lending to portfolio landlords effective from 30 September 2017, Precise, Vida Kensington, New Street, Mansfield and Platform have announced their intentions ahead of the deadline.
Precise Mortgages has announced the creation of a portfolio team to take the burden off brokers when submitting additional information. The lender will require business plans, statements of assets and liabilities and property schedules from portfolio landlord clients, all of which can be submitted in any format desired or on forms provided by the lender. Once submitted, the portfolio team will then input the data into Precise's systems, ensuring that this does not have to be performed by brokers.
Once entered, the portfolio information will remain valid for six months, making further applications that much more convenient. Precise will not change its criteria or application systems, but may change its interest rate stress tests depending on the assets and liabilities of the landlord.
Vida Homeloans, despite not being regulated by the PRA, has also confirmed its intentions to meet the guidelines. Full details will be announced on the 28th September, but the lender has confirmed that brokers will not be asked to enter details on a third-party platform and that existing portfolio schedules may be uploaded as long as they contain the minimum information required under criteria. Vida will keep its current ICRs and stress test against a notional rate of 5.5%. A notional rate of 5% will be used for pound-for-pound remortgaging, while borrowers requesting five year fixed rates will be tested for affordability against a notional rate based on the product pay rate. Vida's maximum limit on portfolio size will remain unchanged at 15 properties, while its maximum exposure limit will be increased to £2m.
Kensington and New Street Mortgages, both part of Northview group, will announce full details of criteria on the 28th and 27th September respectively, but both will require a portfolio schedule and a business plan from portfolio landlord clients. The two lending brands will test affordability using an ICR of 125% and a stress rate of 5.5%, or lower rates from 4.5% for five year fixed rate products. Each lender will have a maximum exposure limit of £2m, and New Street will also apply a cap of 10 properties per client.
Mansfield Building Society will require portfolio landlords to supply statements of assets and liabilities, along with property schedules describing the details of their portfolios and any finance outstanding. Interest will be stressed at 5.5% or pay rate plus 2%, whichever is higher. Mansfield will use an ICR of 125% for basic rate tax payers, consumer BTL, regulated BTL and pound four pound remortgages, otherwise an ICR of 145% will apply.
Meanwhile, Co-op Bank's intermediary arm Platform has announced that it will not be lending to portfolio landlords, therefore only landlords with a maximum of three mortgaged properties will be considered, although existing customers seeking a product transfer with no additional borrowing will not be affected.
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