Castle Trust Capital has announced the implementation of its PRA Phase 2 changes, which require a specialist approach to underwriting for portfolio landlords from 30 September.
Currently, when underwriting buy-to-let mortgages, lenders focus mainly on the rental income and value of the property they are lending against.
With Phase 2 of the new Bank of England underwriting requirements, lenders will have to collect and validate details regarding all the properties that the landlord has an interest in. This will include collecting information on property values, rental income, costs and mortgages.
The Bank of England (BoE) wants lenders to be fully aware of the circumstances of portfolio landlords and the impact any new lending will have on their finances.
Matthew Wyles, group executive director at Castle Trust Capital, said: “The PRA’s requirement for underwriters to take a proportionate approach to portfolio landlords, based on their knowledge pf the borrower, is simply an articulation of sound commercial lending.”
Castle Trust, which already includes a Portfolio Landlord Statement as part of its underwriting process, has published the approach it will take, including the portfolio rental calculations it will use on its website.
Wyles added: “Castle Trust has always specialised in larger, more complex buy-to-let portfolios and so the provisions of SS13/16 are just business as usual for us.”
“This said, it is important that we are clear and transparent with the market and so, by laying out our approach and the portfolio rental calculations that we use, we can eliminate any element of doubt.”