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Accord to query assets and possible financial changes for portfolio landlord lending

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  • 25/07/2017
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Accord to query assets and possible financial changes for portfolio landlord lending
Accord has published its lending criteria for portfolio landlords ahead of stricter underwriting standards being introduced by the Prudential Regulation Authority (PRA) at the end of September.

Portfolio landlords will be required to supply details of any mortgage applications currently being processed with other lenders and complete an assets statement.

The lender will define portfolio landlords as those with four or more properties and will maintain existing rental calculations for new borrowing.

It will assess landlords’ financial strength and competency by considering their experience in the buy-to-let market, the full property portfolio and any outstanding mortgages along with their assets and liabilities.

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.

 

Lender transparency

Brokers have been keen for lenders to announce their approach to the new rules so they can prepare clients for any changes.

So far Aldermore, Santander and The Mortgage Works are among the main lenders to have published their criteria while Coventry Building Society, Shawbrook and Together have committed to the market.

Accord Buy To Let commercial manager Chris Maggs (pictured) 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,” he added.

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