During the National Association of Commercial Finance Brokers (NACFB) Commercial Finance Expo 2017 – held at Birmingham's NEC on 21st June – a panel debated how buy-to-let lenders will be impacted from the new portfolio landlord rules later this year
In 2016, the PRA announced that lending to portfolio landlords (those with four or more mortgaged buy-to-let properties) should be assessed using a specialist underwriting process, with lenders having until 30th September this year to implement it.
While most specialist lenders on the panel declared that they already individually underwrote cases and were therefore set up to undertake the new procedure, this change to the underwriting process was deemed to be more of an issue for the larger, vanilla lenders.
“I think the real challenge for 1st October is probably for some of the bigger, more vanilla lenders, who are used to almost automating the whole of their process, as this moves completely away from that,” said Adrian Moloney, sales director at OneSavings Bank.
“…I don’t think it will be as difficult for the specialist lenders to adapt to these changes, as perhaps it will be for some of the bigger players in the market.”
However, David Whittaker, CEO of Mortgages for Business, said that with no one having yet published what they are going to do, the industry was “behind the pace”.
“…It’s great to hear that everyone is ready to go, but then being ready to go and you [brokers] knowing what they [lenders] want are two different things…”
“…Somehow we have got to get the message out over the next few weeks so we can start to tell landlords [or] otherwise the market will just freeze in catatonic shock on 1st October, and as Adrian has already alluded to, there are some lenders who are well prepared for it, there are others who have never done this, and some of them will vote not to play at all.
“So the remaining lenders, many of whom are here today … challenger banks and specialist lenders, are going to inherit massive volumes of work.
“Not 25% more, but 125% more, 250% more…”
“…It is a big change for the landscape, and I’m not quite sure we have dialled it in correctly as an industry.”
