OneSavings Bank (OSB) has announced its new lending criteria for portfolio landlords to help brokers prepare for the PRA Phase 2 changes coming into effect on October 1 2017.
The lending group, which includes the Kent Reliance and InterBay brands, will now require portfolio landlords to provide a business plan, assets, liabilities statements and cash flow statements in support of any mortgage application if they own four or more mortgaged properties.
Information on the borrower’s buy to let portfolio will also need to be provided and assessed as part of the underwriting process.
Adrian Maloney, Sales Director at OneSavings Bank, said: “Brokers have had to move quickly to update their advice following a raft of tax and regulatory changes to the buy-to-let sector, and will need to do so again once the upcoming portfolio landlord changes land in October.”
“There’s no doubt that greater scrutiny on loan affordability will be a good thing for the sustainability of the sector, but it will also mean more of an administrative burden.
Brokers will be able to submit borrower information via the new Buy to Let Hub, a submission platform developed in partnership with eTech.
The platform will offer brokers a dashboard portfolio stress testing and income coverage ratio assessment that will help to provide a rapid response to loan applications.
Portfolio landlords will be subject to an interest stress test of 5% on the rest of their portfolio and must meet or exceed an interest cover ratio of 125%.
Maloney promised to keep things simple for brokers. “OSB have always welcomed portfolio landlords and the changes here cement our position as the lenders of choice for these borrowers.”
“We’ve chosen to announce our criteria well ahead of the October deadline, to help brokers prepare for the changes in good time so they can feel confident when preparing clients to submit a portfolio application.”
He concluded: “Together with the new Buy to Let Hub, we’re doing all we can to transition brokers and their clients into the new landscape with the minimum of fuss.”