Portfolio Landlord Buy to Let
With the implementation of Prudential Regulation Authorities (PRA) Phase 2 recommendations at the end of September 2017, lenders have had to change their underwriting approach towards portfolio landlords (those with four or more buy to let properties). Many lenders are stipulating that a landlord must be able to provide an overview of their property business plan when applying for a mortgage.
Whilst this is a new concept in the buy to let sector, it is something that commercial lenders have often requested from clients. This clearly shows that lenders, with guidance of the regulatory enforcement body of the PRA, are now taking a more commercial approach to portfolio buy to let lending. They’re doing this in an effort to try and spot any possible risks to a landlord’s financial stability, whilst ensuring the landlord has a clear set of goals and is aware of the timescale needed to achieve them.
Of course the added paperwork will not be popular with all landlords but for the same reasons that a business plan is useful to a lender, so it can actually be useful to the landlord themselves. Once you have a clear plan in place, you can use it to work with your mortgage brokers, property consultants, letting agents, financial advisors and property tax consultants.
