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Aldermore reveals portfolio buy-to-let approach

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Aldermore has revealed how it will approach lending to portfolio landlords when new Prudential Regulation Authority underwriting rules are rolled out in September.

Aldermore will split portfolio landlords into two categories to determine what further information needs to be provided to underwrite the individual case.

Standardised templates will be available for each of the information requirements.

The lender will require face-to-face interviews for cases where landlords have 11 or more mortgaged buy-to-let properties with Aldermore or total borrowing of £1m or more.

Other checks will include portfolio affordability testing, rental income validation by postcode, and where personal income is used, assessment of living costs and essential expenditure.

Aldermore commercial director, mortgages, Charles McDowell says: “We recognise that there are big changes ahead and as a business, we have focused our attention to ensure that we and our brokers are best placed to meet these required changes.

“Having spoken to brokers, we recognise that lenders need to respond to the changes as there is currently not enough support available for brokers who need to adapt. This is why we have created the guides which we believe will help to provide the necessary information and support.”

“We want to assure our broker partners that we remain committed to the buy-to-let market by doing everything we can to support portfolio landlords when these changes are implemented later in the year.”

The changes will mean more stringent affordability assessments across the market and lenders will need to apply a specialist underwriting approach.

But with the changes fast approaching, many buy-to-let lenders have not revealed their approach.

The Mortgage Works gave a partial update in late June.

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