Important PRA changes to BTL lending from 30th September

by Property118.com News Team

14:39 PM, 7th August 2017
About A year ago

Important PRA changes to BTL lending from 30th September

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Important PRA changes to BTL lending from 30th September

The following is another 90 second video produced by our friends at Shawbrook Bank to explain how BTL mortgage underwriting will change from September this year.

Is it a good thing that mortgage lenders are being forced to lend more prudently or do you see it another way?

Please discuss.



Comments

Mark Alexander

14:41 PM, 7th August 2017
About A year ago

I think the new rules are logical and overdue.

It will cause a problem for some borrowers but only if they took massive risks when borrowing historically and haven't been able to increase rents since then.

H B

8:11 AM, 8th August 2017
About A year ago

I agree. If you have low LTVs and high rental coverage, you are fine.

But if you are facing a challenge with s24 and this would be revealed by looking across the portfolio, then things will be far more difficult come the Autumn.

Mark Alexander

8:22 AM, 8th August 2017
About A year ago

Reply to the comment left by H B at 08/08/2017 - 08:11They will indeed and that's why so many landlords are consulting us in regards to optimising their tax position and considering alternative structures in which to operate their businesses

Monty Bodkin

9:27 AM, 8th August 2017
About A year ago

From re mortgaging recently, it seems many brokers and lenders are already implementing this.
A very good thing from my perspective.
What the doomsters miss about this and Basel 3 was that they help stabilise and strengthen the market, not crash it.

Trevor Cooper

10:01 AM, 8th August 2017
About A year ago

Reply to the comment left by Mark Alexander at 07/08/2017 - 14:41It's already happening. I have just had a request from Paragon Mortgages for a lot more information than originally required. They have asked for a full business plan going into detail of where properties are, type, tenant profiles, my experience etc, and a full cash flow projection for the next 12 months. For me no issue as I run a tight ship. I will put off the amateurs...

Dr Rosalind Beck

14:02 PM, 8th August 2017
About A year ago

Reply to the comment left by Monty Bodkin at 08/08/2017 - 10:11Looks okay.

Only wasn't sure what this meant:
'• rent-to-costs financial model utilised'

Annie Landlord

11:26 AM, 9th August 2017
About A year ago

So the Lenders want business plans - but according to The Treasury we aren't running a business, we're investors!:)

Dr Rosalind Beck

11:52 AM, 9th August 2017
About A year ago

Reply to the comment left by Annie Landlord at 09/08/2017 - 11:26I know. Its pathetic.

Trevor Cooper

12:07 PM, 9th August 2017
About A year ago

Reply to the comment left by Dr Rosalind Beck at 08/08/2017 - 14:02'rent-to-costs financial model utilised' - Yes I have to admit I could not work this one out. It was a good exercise creating the business plan though, and I recommend it to others. It made me question / re-think a few points

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