Advisers are being encouraged to lean on their networks or mortgage clubs to deal with the wide variety of criteria lenders now have in place for buy-to-let landlords, following the introduction of new underwriting requirements.
The Prudential Regulation Authority introduced new underwriting standards in September this year for portfolio landlords.
Jane Benjamin, head of relationship management at Sesame and PMS, said the main challenge for advisers is that each lender has made an individual interpretation of the PRA’s guidelines, along with their appetite for writing this type of complex business.
She explained: “What this means in practice for advisers is that each lender may ask for slightly different information, such as portfolio statements, business plans, cashflow forecasts and statements of assets and liabilities.
“At times like these our top tip for advisers is to keep in touch with their mortgage club or network, because it is simply not practical for advisers to compile criteria and requirements for every lender themselves.”
Steve Olejnik, chief operating officer at Mortgages for Business, suggested: “Financial advisers should consider whether they want to handle complex BTL cases because they take a great deal of understanding, more time and paperwork to place with the right lender – in the most part, for no extra recompense.”
Portfolio landlords have seen a number of reforms to the BTL sector recently, including a 3 per cent stamp duty surcharge on additional properties.
The term ‘complex buy-to-let’ covers homes of multiple occupation (HMOs), student lets, multi-unit freeholds or portfolios held in limited companies, according to Charles McDowell, commercial director, mortgages at Aldermore.
One of his top tips for advisers dealing with complex BTL cases are to check clients’ portfolio size, noting “some lenders have limits on the number of properties and/or the value of them”.
To read more on how to advise on complex buy-to-let cases, visit the FTAdviser and Aldermore Buy-to-Let Hub, which looks at how to help your clients with BTL and taking a personal approach to BTL lending.
eleanor.duncan@ft.com
