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New guide to help you understand portfolio landlord rule changes

Specialist bank Aldermore has launched a new guide to help buy-to-let investors and mortgage brokers understand its underwriting changes ahead of more stringent industry-wide regulations being introduced for portfolio landlords.

Portfolio landlords will now be divided into two categories in order to determine what further information needs to be provided to underwrite the individual case, in accordance with the lender’s new rules.

For landlords with up to 10 mortgaged buy-to-let properties with Aldermore, brokers will need to submit a portfolio schedule and a business plan.

For those with 11-plus mortgaged buy-to-let homes with Aldermore, additional documents will now be necessary, and that includes a 12-month cash flow forecast statement and a statement of assets and liabilities.

Those of you with 11 or more mortgaged buy-to-let properties with Aldermore or total borrowing with the lender of more than £1m will also be required to take part in a face-to-face interview.

Other checks will include portfolio affordability testing, rental income validation by postcode, and where personal income is used, assessment of living costs and essential expenditure.

Aldermore’s lending criteria changes are being prompted by the Prudential Regulation Authority’s (PRA) decision to introduce more stringent affordability assessments for portfolio landlords - defined as those with four or more properties – from September this year.

Charles McDowell, commercial director, mortgages, at Aldermore, commented: “We recognise that there are big changes ahead and as a business, we have focused our attention to ensure that we and our brokers are best placed to meet these required changes.

“Having spoken to brokers, we recognise that lenders need to respond to the changes as there is currently not enough support available for brokers who need to adapt. This is why we have created the guides which we believe will help to provide the necessary information and support.

“We want to assure our broker partners that we remain committed to the buy-to-let market by doing everything we can to support portfolio landlords when these changes are implemented later in the year.” 

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