Foundation has pledged to keep changes to a minimum as it outlined its approach to underwriting for portfolio landlords.
The intermediary-only lender said background portfolios must have a maximum aggregate loan-to-value of 75 per cent calculated across the whole portfolio, including unencumbered properties.
It will apply a minimum aggregate rental cover ratio of 125 per cent, stressed at an interest rate of 5.5 per cent.
Intermediaries will be able to upload details of landlords’ portfolios from a spreadsheet, and foundation will verify key data points electronically.
The number of background portfolios remains unlimited and the maximum finance permitted with foundation will be kept at £2m.
Foundation’s products have no minimum income and no minimum period of employment or self-employment.
The changes apply to landlords with four or more properties, as specified by the Prudential Regulation Authority.
Jeff Knight, director of marketing at Foundation Home Loans, said: “Our research, undertaken amongst intermediaries and portfolio landlords, highlighted a need for a proposition that is simple and pragmatic – something that has always been at the heart of our approach.
“Therefore, we have not had to change much at all and will continue to provide a straightforward proposition to intermediaries.
“Indeed, portfolio landlords already represent around 50 per cent of our business, so unlike other lenders, this is very much business as usual for us and our intermediary partners.”
Liz Syms, chief executive at London-based Connect Mortgages, commented: “It is good to see more lenders coming out and providing clarity on what they are doing, and the simpler they can keep it, the better for everyone concerned.”
simon.allin@ft.com
