A number of intermediaries contacted by FTAdviser said they could be forced to increase their fees due to longer processing times, with smaller brokers more likely to be affected by the changes.
Several lenders have now come forward with their underwriting requirements for portfolio landlords – defined as those with four or more properties – but their approaches vary considerably.
The requirements were mandated by the Prudential Regulation Authority to reflect the differences between simple and complex BTL, the latter of which involves cash flows and costs arising from multiple tenancies.
But the need for intermediaries to submit additional documents, such as business plans, asset and liability plans and a cashflow forecast, threatens to impose a large admin burden on mortgage brokers.
Nick Green, broker at Coventry-based Alternative Estates and Financial Services, told FTAdviser: “It will be a lot more work for us as brokers, so fees we charge clients may have to be reviewed. Also, the work involved for the lenders to underwrite is really going to restrict who has access to the products.
“I have one landlord with 55 properties – are they going to calculate every single one? How much time and effort, and how much paperwork will that be?”
Matthew Fleming-Duffy, director at Bournemouth-based Cherry Finance, said the PRA was right to make the changes – but agreed that fees may have to rise.
Responding to the example given by Mr Green, he said to input the details of 55 houses, would take a whole day.
"What would we do? A lot of us are small businesses. We would have to increase fees for portfolio landlords.”
Mr Fleming-Duffy suggested lenders adopt a standardised spreadsheet that would contain all the information they require, preventing the need for extra work when submitting a case via a new lender.
Liz Syms, chief executive at London-based Connect Mortgages, said commercial brokers often require additional supporting documents when submitting applications - but they also charge higher fees.
She added: “Brokers may well shy away from this business, or as an alternative could look to refer a client or use the packaging services of companies like ourselves to help them as we are used already to dealing with complex document requirements from commercial lenders.”
But Tony Silver, director at London-based White Horse Mortgages, was more relaxed about the new requirements.