Keystone has brought forward the date of its procuration fee hike by one month in recognition of the extra workloads brokers face when dealing with portfolio landlords.
Intermediaries completing the specialist lender’s Classic Range cases will now receive the additional 0.1 percentage point increase from today (1 September).
Changes to the underwriting process for portfolio landlords mandated by the Prudential Regulation Authority mean brokers have been required to submit more detailed information to support mortgage applications.
The increased procuration fee will apply even if the client does not meet the portfolio status definition.
Keystone’s chief operating officer Steve Olejnik said: “For some time now, we’ve been asking brokers for more detailed information on landlords’ portfolios than previously, so we thought it only right to compensate them for the additional time they now have to spend in preparing an application for submission.”
Brokers facing an extra administration burden due to the Prudential Regulation Authority (PRA) changes, which are due to be rolled out by 30 September, have previously said longer processing times mean they may be forced to hike fees or cut business volumes.
Martin Stewart, director at London Money, said: “Anything that will increase the income for the broker has got to be good, and anyone bringing it forward has got to be praised for doing so.
“You could look at it the other way and say maybe business volumes are not coming in and they are trying to get back market share.
“The proc fee model has not changed in 10 years or so, and it needs to be addressed from a lender’s point of view. Anything that helps the broker from an income point of view has got to be praised.”
Keystone said it will make further announcements on the new PRA requirements for portfolio landlords before 1 October.