Kensington overhauls underwriting for portfolio landlords

Kensington overhauls underwriting for portfolio landlords

The Northview Group has announced changes to the buy-to-let underwriting processes for portfolio landlords for the Kensington and New Street Mortgages brands.

In line with the Prudential Regulation Authority’s (PRA) requirements, both brands will require a portfolio summary with details of all portfolio properties, along with a business plan outlining the landlord’s plans for the portfolio.

Kensington will update its proposition from 28 September, and while it will not restrict the total number of properties held in a portfolio, under its current rules it will only lend a maximum of £2m per landlord borrower.

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Both brands will offer a standard rental cover from 125 per cent at 5.5 per cent assessment rate, with lower assessment rates offered on its five-year fixed products, starting from 4.5 per cent. 

Current criteria for landlords with three or fewer properties will remain unchanged.

The PRA announced stricter underwriting rules for portfolio landlords – those with four or more properties – in September last year, and the final deadline for lenders to submit their updated approach is September 30. 

A recent survey for Kent Reliance showed nearly half of landlords are still not fully clued-up about the underwriting changes.

Steve Griffiths, director of sales and distribution at The Northview Group, said: “These latest changes from the PRA form part of a wider regulatory update to the buy-to-let market.

"While the portfolio landlord sector is increasingly complex, there are many landlords out there that continue to require support from lenders for their buy-to-let plans.

“With over 15 years of experience in the buy-to-let sector, the group’s brands are there to support professional landlords following the PRA’s changes.

"This newly updated proposition reflects that commitment to both parts of this market, those with fewer properties and the experienced professional landlords that want to build on their existing portfolios.”

Mike Richards, director at London-based Mortgage Concepts Associates, said: “Two million pounds is not a great deal, especially for portfolio landlords, although it depends what other lenders do.

“A lot of lenders are dumping portfolio landlords. [Northview] are saying we will do it, but not opening themselves up to be bombarded with applications. 

“None of my landlords have come back saying we want to borrow any more money, and I don’t think we are going to get many new buy-to-let borrowers. We will have to wait and see where the land lies after September.”

In June, Kensington launched a Help to Buy equity loan range with rates starting from 3.64 per cent and free valuations, as well as updating its residential New Build range.