Specialist lender Aldermore has released a new guide to help buy-to-let investors and mortgage brokers understand its underwriting variations ahead of more stringent, industry-wide portfolio landlord rule changes.
Aldermore Releases New Guide on Portfolio Landlord Rule Changes
Portfolio landlords will now be divided into two categories in order to determine what further information must be provided to underwrite the individual case, in accordance with the bank’s new portfolio landlord rule changes.
For landlords with up to ten mortgaged buy-to-let properties with Aldermore, brokers must submit a portfolio schedule and business plan.
For those with 11 or more properties, additional documents will now be necessary, including a 12-month cash flow forecast statement, and a statement of assets and liabilities.
Landlords with 11 or more mortgaged buy-to-let properties with Aldermore, or total borrowing with the lender of more than £1m, will also be required to take part in a face-to-face interview.
Other checks will include portfolio affordability testing, rental income validation by postcode, and, where personal income is used, assessment of living costs and essential expenditure.
Aldermore’s portfolio landlord rule changes are being prompted by the Prudential Regulation Authority’s (PRA) decision to introduce more stringent affordability assessments for portfolio landlords – those with four or more properties – from September 2017.
The Commercial Director of Mortgages at Aldermore, Charles McDowell, says: “We recognise that there are big changes ahead, and, as a business, we have focused our attention to ensure that we and our brokers are best placed to meet these required changes.
“Having spoken to brokers, we recognise that lenders need to respond to the changes, as there is currently not enough support available for brokers who need to adapt. This is why we have created the guides, which we believe will help to provide the necessary information and support.”
He adds: “We want to assure our broker partners that we remain committed to the buy-to-let market by doing everything we can to support portfolio landlords when these changes are implemented later in the year.”