Keystone has announced that it will be raising its buy-to-let procuration fees to 0.7% to recognise the additional work mortgage brokers will need to do for portfolio landlord applications, which includes gathering more detailed information than lenders may have previously requested, following the Prudential Regulation Authority’s (PRA) new guidelines on underwriting buy-to-let mortgage applications from portfolio landlords.
The higher proc fee will be applied to all ‘classic range’ cases even if the landlord does not meet the portfolio status definition, with the new rules starting on 1 October 2017.
The PRA defines a portfolio landlord as a borrower with four or more distinct mortgaged buy-to-let homes, which means that Keystone may request more detailed information from portfolio landlords to help make the appropriate lending decision, in according with the new rules.
“We’ve always focused on the more professional landlord with complex borrowing requirements, so in a sense, it will be business as usual for us as we already take a specialist approach to underwriting,” said Keystone’s CEO, David Whittaker. “However, we are mindful that the PRA has created a clear distinction between portfolio and non-portfolio landlords, and as such, we will have different underwriting policies for both.”
Whittaker added: “As a lender, it’s important to us that we both acknowledge and reward the additional legwork being undertaken, and we will keep proc fees under review whilst the new processes are bedding in.
“In the meantime, we are working hard to reduce the impact on brokers and landlords. We have some new tools in the pipeline to help streamline the process for brokers and we are determined to ensure that service levels are maintained as the market adjusts to the new environment.”