Following a review of the buy-to-let market in 2015/16, the Prudential Regulation Authority (PRA) has announced a series of new underwriting standards for portfolio landlords. From 30 September, SS13/16 will apply to landlords with four or more mortgaged buy-to-let (BTL) properties, seeing industry standards focus for the first time on bricks and mortar assets rather than the consumer.
The new requirements for stress-testing properties as well as underwriting mortgages creates new challenges and opportunities for lenders, intermediaries and technology providers in our industry.
Technology is more important than ever as lenders and brokers navigate a new legislative landscape which necessitates an industry-wide solution to address these new rules and streamline the mortgage application process.
The specialist lending market is emerging as fertile territory for the more specialist lender and broker. But to remain in this market it is important that new layers of administration and compliance do not overburden the industry with more cost complexity and inefficiency.
A simplified portfolio submission process for landlords and automated assessment of portfolio data and property valuation information across multiple lenders will achieve this.
Helping make lenders easy to do business with under these new portfolio landlord requirements will lead to a successful transition from 30 September.
These new PRA underwriting standards herald a new era for the property services industry, where technology can further manage the increasing sophistication being heaped onto it.
The mortgage intermediary is the source of the clear majority of buy-to-let business generated in the UK today. Ensuring they can still do business with their chosen buy-to-let lender with as little upheaval as possible will be somewhat determined by the decisions those lenders make on technology choices over the coming months for submitting portfolio landlord information.