OneSavings Bank (OSB) has outlined its new lending criteria for portfolio landlords. The move aims to help brokers prepare for the PRA Phase 2 changes, which will come into effect on October 1 2017.
The lending group includes the Kent Reliance and InterBay brands. The group will now require portfolio landlords to provide several documents including a business plan, assets, liabilities statements and cash flow statements in support of any mortgage application. This is applicable if they own four or more mortgaged properties. The borrower will also need to provide information on their portfolio as part of the underwriting process.
Sales Director at OneSavings Bank, Adrian Maloney, commented on the changes: ‘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.’
Borrower information will be submitted by brokers via the new Buy to Let Hub. This is a submission platform developed in partnership with eTech. The platform provides brokers with a dashboard portfolio stress testing and income coverage ratio assessment that will help to provide a rapid response to loan applications.
There will be an interest stress test of 5 per cent for portfolio landlords on the rest of their portfolio. They must also meet or exceed an interest cover ratio of 125 per cent.
Maloney continued: ‘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. 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.’