Accord have released their much anticipated lending criteria details for portfolio landlords, set to come into effect on the 30th of September.
The lender has outlined its lending criteria requirements for buy to let property investors who own four or more mortgaged buy to let properties. This comes following stricter underwriting standards as recently outlined by the Prudential Regulation Authority.
In order to assess both the competency and financial strength of a portfolio landlord, Accord will take into account the extent of their experience in the buy to let market, their full property portfolio and any outstanding mortgages. Their assets and liabilities will also be assessed by the lender.
Accord’s existing rental calculations will also apply for all new borrowing deals. All background properties must combine to meet a minimum rental calculation of 135 per cent interest coverage ratio (ICR) at a stressed rate of 5 per cent. There will be no changes to loan to value (LTV) limits, nor to maximum loan size or minimum income criteria. Stress rates and the number of properties accepted by the lender will also remain the same.
Accord’s buy to let commercial manager, Chris Maggs, commented on the new criteria. He said: ‘With so many changes happening to the buy to let market recently we believe it’s important to be transparent about our changes to criteria so brokers and landlords have time to prepare ahead of the new rules. We’ve tried to make our portfolio lending criteria as simple and straight forward as possible. In addition to our standard criteria, portfolio landlords will be required to supply details of any applications currently being processed with other lenders and complete an assets statement. We will also ask these landlords if they anticipate any financial changes or changes in circumstances which could impact the affordability of their portfolio.’