Accord Buy to Let has announced details of its lending criteria for portfolio landlords, set to come into effect on 30 September.
In accordance with stricter underwriting standards defined by the Prudential Regulation Authority (PRA), the lender has announced its requirements for those landlords who own four or more mortgaged buy-to-let properties.
Accord will take their experience in the buy-to-let market into consideration, while assessing the financial strength and competency of a portfolio landlord. They will also examine their full property portfolio and any outstanding mortgages along with their assets and liabilities.
Chris Maggs, Accord Buy to Let’s Commercial Manager, 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.”
Accord’s existing rental calculation will apply for new borrowing. At a stressed rate of 5%, all background properties must collectively meet a minimum rental calculation of 135% interest coverage rate (ICR).
There will be no changes to maximum loan size, loan-to-value (LTV) limits or minimum income criteria. Stress rates and the number of properties accepted will remain the same.
Maggs aims to make the portfolio lending criteria as simple and straightforward 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,” he said. “We will also ask these landlords if they anticipate any financial changes or changes in circumstances which could impact the affordability of their portfolio.”