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September 30th’s PRA changes

Enable’s experienced IFAs have seen the buy to let sector undergo a number of changes in recent years. For investors in housing it has been a period of challenge and with the Prudential Regulation Authority’s (PRA) second phase of new underwriting standards for buy to let lending coming into effect on 30th September, there is a bit more change for the sector to come.

So what does this new change really mean? The guidance set out by the PRA, states that from 30th September 2017 landlords who have four or more mortgaged buy to let rental properties will be considered as portfolio landlords by lenders. The PRA ten expects all firms that conduct lending to portfolio landlords to use a specialist underwriting process that takes into account complex borrowing scenarios.

So if you have 4 properties and want to add another to your portfolio by applying for a new buy to let mortgage it will require the entire portfolio to be underwritten, even if the other mortgages are with a different lender. Lenders will also be required to use additional affordability tests on portfolio landlords and will require additional documentation to support applications.

If you are investing in property as part of your wealth management our experienced IFA’s in Bishop’s Stortford can help you look at clarifying assessment criteria. It is important that any landlords planning to develop their portfolios understand how the changes due on 30th September could impact on their current or future plans.

Your home could be at risk if you do not keep up the mortgage repayments

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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