Summer will be busy as advisers and portfolio landlord clients look to secure the latter’s needs ahead of the PRA changes
Given that the PRA’s underwriting changes regarding portfolio landlord loans are due to be introduced from the end of September, I suspect the buy-to-let sector could be in for an interesting summer.
Certainly, if I was a mortgage adviser, I would be making my portfolio landlord clients (newly defined as those with four or more loans) aware of the changes and how they might affect the lending process from October.
After all, there are likely to be far longer processing times from those lenders involved, as well as a much greater paperwork requirement given that lenders will be obliged to look into the affordability of all loans, rather than just the one being applied for.
Indeed, I predict a busy few months as advisers and their portfolio landlord clients look to secure the latter’s finance needs prior to the changes taking place.
I was initially worried that certain ‘mainstream’ buy-to-let lenders would look at these greater requirements and shy away from portfolio landlord lending. However, the recent announcement by TMW that it would continue to lend in this space was reassuring and gave me hope that other lenders of this ilk would soon declare similar intentions.
Advisers will want to use the time between now and September to communicate with clients and work through their immediate needs, rather than wait until the underwriting changes come into play. They need to be confident that the lenders they work with can guarantee that their criteria for portfolio landlords will not change, both now and in September.
It helps to find a lender that has always looked at landlords in the round, taking into account their borrowings and how these affect their ability to service loans.
Bob Young is chief executive of Fleet Mortgages