Important PRA changes to BTL lending from 30th September

Important PRA changes to BTL lending from 30th September

14:39 PM, 7th August 2017, About 7 years ago 15

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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.

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Nick Pope

10:47 AM, 12th August 2017, About 7 years ago

I consider it to be a reasonable and sensible approach - if I was going to lend money to an individual or a company I would want the whole picture not just a fragment.
In addition, as a surveyor and valuer it is very apparent to me that there is some very risky lending going on at present and that soem landlords are being economical with the truth when making applications particularly by trying to disguise HMO's, occupation by sharers or inflated rents evidenced by copies of ASTs on which the ink is barely dry.
As I have mentioned before on this site part of a valuers remit is to reprt back any concerns we have regarding occupation, ownership, tenancies and even anything illegal being done at the property. It would make my job much easier if additional vetting was done before I bacame involved.
If anyone is imterested I have reported back to lenders a cannabis farm in the roof, by-passing of meters, 4 sharers AST with 15 mattresses at the house and once a young lady who was obviously in business on her own account with no equipment needed except the schoolgirl and nurses uniforms. To quote a now defunct newspaper I made my excuses and left!

Dr Rosalind Beck

11:56 AM, 12th August 2017, About 7 years ago

I think it would be stupid though if loans were refused on the basis that one or two properties in a portfolio didn't meet the rental coverage when others surpass the coverage by a long chalk. Some of us portfolio landlords don't want to have to hike the rent on some of our currently low-rent properties where the person is really struggling or worse still evict them when they have been living there for years, just to get the figures right.

Monty Bodkin

12:20 PM, 12th August 2017, About 7 years ago

Reply to the comment left by Nick Pope at 12/08/2017 - 10:47"inflated rents evidenced by copies of ASTs on which the ink is barely dry."

That is easily verified Nick by the landlord's bank statements and sa302's (or equivalent) which most lenders have required for some time.

NW Landlord

12:14 PM, 25th November 2017, About 7 years ago

Posted this on another thread for peoples info
Another massive issue for us battered portfolio landlords is this PRS. I didn’t think it would be that bad an issue but I’m wrong. In short anyone with over 10 will have no access to mainstream lenders at all, the days of PRS in individual names is dead the government has basically shut it it down and PRS is the final nail in the coffin. My broker said it is so challenging out there and individual portfolio landlords have little or no access to finance. We are buying in a limited company using these specialist lenders but they are basically all over the place we paid for 3 valuations 10 days ago and haven’t heard a thing. We have clients who buy property getting knocked back left right and centre aswell. My broker did give some positive news that product switch with mortgage works will be available so anyone with these keephold they are gold dust.
My prediction is a short period of turmoil while the market adapts as these mainstream lenders need to lend so I see a shift towards limited company in a grand scale
Anyone with 10 year mortgages with Mx may also have an issue I am exploring options with my broker as we speak and will report back but these in short will have to be put in a limited company to massive expense or sold.

Chris Novice Shark Bait

13:04 PM, 25th November 2017, About 7 years ago

Thanks NW.
Would like to hear more from portfolio landlords having difficulty raising finance and any concerns re: M.E. that emerge.
We have an interest only mortgage one one of 2 primary residences. It sourced BTL deposits etc and was for business use so is included in s24 capture. It is due to be repaid in June 2018. We anticipated this would be long enough but girls returned from uni and living at home, Partner not wishing to retire just yet etc. The lender will not extend even though LTV only 50%. So my partner and 2 daughters willing to move out and rent so we can keep the asset (one of few actually increasing in value) which would have rental coverage of 400%.
My broker is struggling so had to send requested information etc but not heard back in over a week. We sense the door is shutting on us despite great credit rating sustained for 10 years etc.

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