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Ask the expert: What do the PRA’s portfolio lending changes mean for my business?

  • 05/10/2017
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Ask the expert: What do the PRA’s portfolio lending changes mean for my business?
In the first of a new series, Adrian Moloney, sales director at OneSavings Bank, answers the questions causing you most frustration in the mortgage market. First up he tackles the portfolio lending changes.

We’ve now seen the Prudential Regulation Authority’s (PRA) changes to underwriting standards for portfolio landlords (those with four or more mortgaged properties) introduced.

As of last weekend lenders, have to incorporate much more detailed information about these borrowers’ portfolios and judge affordability across all properties when underwriting cases.

The changes are designed to improve the long-term sustainability of the sector, a worthy aim, and we don’t believe that they will reduce demand from professional, multi-property investors.


Vibrant market

In fact, with the recent changes to regulation and taxation, it is this part of the market we expect to be the most vibrant in coming years as amateur landlords exit the market.

Our own research indicates that in the first three months of 2017, the number of landlords expanding portfolios only slightly outnumbered those reducing them.

That said, the new standards may bring some short-term pain as brokers and their clients adapt to greater levels of documentation. But there are several steps you can take to minimise disruption, and capitalise on change.

It’s important that you get to grips with the finer points of the changes and what your clients will need to provide.


Client awareness

A big issue is client awareness; our experience suggests that landlords have a very low level of knowledge of the changes, so there is goodwill to be generated and business to be won from proactively engaging with your clients to make sure that they know what’s coming.

Beyond that, we get into the practical matters of business plans, cashflow forecasts and asset and liability (A&L) statements, which if dealt with well, will smooth the application process for all.

Brokers will naturally already be familiarising themselves with lenders’ new approaches to underwriting portfolio landlords and new criteria.

This needn’t just be a case of reading announcements. Speaking to your BDMs will help you understand exactly what your trusted lenders are looking for and help you get the best possible turnaround when submitting an application.

But it is not just about understanding the new criteria and documentation. Look for lenders using tech solutions which support uploading client data to speed the process up.


You can put your questions about the mortgage market to our expert by sending them to Mortgage Solutions features and contributing editor Owain Thomas on


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