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What are the implications of the PRA changes for landlords?

A number of mortgage lenders have now revised their affordability criteria, in line with the Prudential Regulation Authority’s (PRA) supervisory statement on buy-to-let, introducing separate coverage ratios for individual and corporate borrowers, as the regulator looks to cool what it perceives to be aggressive buy-to-let lending practices.

The crackdown by the PRA comes into force next month and will see lenders conduct tougher ‘stress tests’ to ensure borrowers can repay their mortgages if interest rates rose to 5.5%.

Watch sales director of Shawbrook Commercial Mortgages, Emma Cox, discuss the recently announced PRA changes and the effect these may have on landlords’ investment strategies, as well as how landlords may want to consider getting applications in prior to the changes early next year. 


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