The Prudential Regulation Authority (PRA) has set out new, stricter underwriting standards for landlords who own four or more mortgaged buy-to-let properties.
Accord, which is part of Yorkshire Building Society, will assess the financial strength and competency of a portfolio landlord by taking into consideration their experience in the buy-to-let market, their full property portfolio and any outstanding mortgages along with their assets and liabilities.
Accord’s existing rental calculations will apply for new borrowing. All background properties must collectively meet a minimum rental calculation of 135% interest coverage ratio (ICR) at a stressed rate of 5%.
There will be no changes to loan-to-value (LTV) limits, maximum loan size or minimum income criteria, while stress rates and the number of properties accepted will remain the same.
Chris Maggs, Accord Buy To Let’s commercial manager, 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.”