According to the Bank of England’s Prudential Regulation Authority (PRA) portfolio landlords are deemed to be borrowers if they have ‘four or more distinct mortgaged buy-to-let properties, either together or separately in aggregate.’
New rules introduced by the PRA from 30th September 2017 mean that all lenders must undertake specialist affordability checks on all borrowers within this category if they are making new purchases or raising capital. Lenders will now have to look at a client’s total buy-to-let portfolio before they can make a decision about offering a mortgage.
Amy Kadir, Mortgage Broker and member of the St Albans mortgage broking team said:
‘At the moment it is unclear how each lender will apply the new guidelines but they will all have to take into consideration your entire buy-to-let property portfolio. Some of the other things they may review is your
assets and liabilities,
total borrowings for all properties,
look at how long you have had the portfolio,
historic and future cashflow,
other income and assets owned by you.
If purchasers are going to have to submit income and mortgage information on their whole buy-to-let property portfolio whenever they refinance a property or purchase a new buy-to-let the work lenders will have to do to assess mortgages will increase substantially. It might take you much longer to get a mortgage decision in principle. We recommend any clients in this position make available an up to date portfolio property spreadsheet, cash flow forecasts and a business plan. You should also have three months of bank statements and any tax returns available to show the lender.’
Lonsdale Mortgages offer mortgage advice on buy-to-let properties
At Lonsdale Mortgages we offer mortgage advice on buy-to-let portfolios. If you have a buy-to-let portfolio we can review the whole of the mortgage market, searching through hundreds of products to find you the right mortgage product for your circumstances.
We can also help you decide which lender to use given your individual financial circumstances. We can take the stress out of applying for your mortgage by dealing with the lender on your behalf. For more information on buy-to-let purchases read Amy Kadir, Mortgage Broker St Albans – How buy-to-let tax changes affect you?
Lonsdale Mortgages do not charge a fee for their services, we receive commission from the provider except if we organise additional borrowing or switch rates for a client with their existing lender, as the provider does not offer commission in these instances. Read Amy Kadir – Why use a Mortgage Broker?
'As a mortgage is secured against your property it can be repossessed if you do not keep up the mortgage repayments'.