Keystone hikes proc fees to 0.7% ahead of PRA changes


Keystone will raise buy-to-let procuration fees to to 0.7 per cent to recognise the extra work brokers will need to do for portfolio landlord applications.

The lender currently pays 0.6 per cent to directly-authorised brokers, though some network brokers get slightly more.

The lender will make the changes from 1 October to its classic range.

From October, lenders will have to adopt a specialist underwriting approach, including gathering more detailed information than before.

Keystone chief executive David Whittaker says: “We’ve always focused on the more professional landlord with complex borrowing requirements, so in a sense, it will be business as usual for us as we already take a specialist approach to underwriting.

“However, we are mindful that the PRA has created a clear distinction between portfolio and non-portfolio landlords, and as such, we will have different underwriting policies for both.”

Whittaker says this will mean Keystone may request more detailed information from portfolio landlords to help make the best lending decision.

He adds: “For brokers this will mean that they will have to spend considerably more time working closely with their clients to collect and collate the necessary paperwork before being able to submit a case.

“As a lender, it’s important to us that we both acknowledge and reward the additional legwork being undertaken, and we will keep proc fees under review whilst the new processes are bedding in.”

A Keystone statement says the increased proc fee will be applied to all classic range cases even if the client does not meet the portfolio status definition.

The PRA defines a portfolio landlord as a borrower with four or more distinct mortgaged buy-to-let properties, either together or separately, in aggregate.

Keystone will make further announcements on the new PRA requirements for portfolio landlords before 1 October.