With just weeks to go until the second round of Prudential Regulation Authority (PRA) portfolio regulation comes into play on 30 September, lenders across the buy to let sector have slowly revealed the approach they’ll take to large landlords going forward.
Precise Mortgages was one of the last lenders to outline its plans earlier this week and, in a move that will be welcomed by larger landlords, revealed its criteria on maximum property number remains unchanged. This means the lender will continue to accept landlords with up to 20 Precise buy to let mortgages (with a combined maximum lending of £5m) and no overall portfolio limit.
Cleary said: “We have extensive details of buy-to-let borrower behaviour based on the output from work undertaken in both our origination and credit analytics fields. In respect of the overall portfolio size, Precise Mortgages has always considered the customer’s back book when assessing a new deal and the new regulations have enhanced this process – the wider customer position has always needed to be satisfactory to approve the new lending. In respect of the level of exposure to Precise Mortgages specifically, then lending up to 20 properties or £5m is comfortably within our credit and concentration risk appetites and allows us to extend facilities to high quality customers who meet all of our criteria.”
But how does Precise’s attitude to exposure compare with the rest of the market? Specialist Lending Solutions has rounded up the criteria changes (or not, as the case may be) of some of the biggest names in the sector to find out.
BM is willing to accept landlords with up to 10 mortgage properties. A maximum of three properties and a £2m lending limit applies across all Lloyds Banking Group brands.
Accord says its criteria relating to the number of properties remains unchanged. That means the lender will accept a maximum of three properties per applicant secured by a mortgage from the Yorkshire Building Society Group with a total borrowing of £1m and a maximum of 15 buy-to-let properties held per application (inclusive of all Yorkshire Building Society Group mortgaged properties) within the customers’ portfolio, of which a maximum of 10 can be mortgaged.
Earlier this summer Karen Bennett, sales and marketing director of Shawbrook Commercial, said the lender’s criteria for portfolio buy-to-let lending would remain the same. Shawbrook will not restrict the number of properties that it lends on and says it will consider lending up to £15m to any one client
The Mortgage Works (TMW)
Nationwide subsidiary TMW says it will continue to accept portfolios of all sizes, with no limit to the number of properties.
Aldermore will split landlords into two categories – standard assessment and enhanced assessment. Landlords with 11 or more properties (or total borrowing with Aldermore of £1m or more) will fall into the enhanced assessment category and will require more documents when applying for a mortgage including 12 month cash flow forecast and a statement of assets and liabilities. They’ll also be required to have a face to face interview with the lender.
Natwest will increase the total number of buy-to-let properties it will allow a landlord customer to own from four to 10. The total will include unencumbered properties and those mortgaged with another lender. The maximum aggregate customer borrowing allowed will be increased to £3.5m, up from £2m.
Paragon has no limits on the mortgaged properties a landlord will be allowed to have in their portfolio OR the number of properties a landlord will be able to have mortgaged with Paragon.
OneSavings Bank (including Interbay and Ken Reliance brands)
OSB says it has no limit on the wider portfolio and doesn’t have an upper cap when portfolio landlords arrange mortgage finance through the group.
Keystone has no restriction on the number of properties that a landlord has in the background. CEO David Whittaker says “We welcome borrowers with as many properties as they own be they owned personally, jointly with others or in a number of limited companies.”
Portfolio landlords can access a maximum of £2m of loans with Keystone on any number of flats, houses, HMOs or freehold blocks subject to no property being less than £100,000 in value and no individual loan being generally above £750K.
“That said, case by case, we will look above £750,000 per unit and a portfolio lend above £2m”, adds Whittaker.