Paragon Mortgages is the latest in a long line of lenders to implement changes for portfolio landlords ahead of the Prudential Regulation Authority’s (PRA) new requirements on 30 September.
The new rules, which Paragon is implementing from today, have been designed to comply with the PRA’s new guidelines on underwriting buy-to-let mortgage applications from portfolio landlords.
The PRA defines a portfolio landlord as a borrower with at least four distinct mortgaged buy-to-let properties, which means that Paragon Mortgages may now request additional detailed information from portfolio landlords to help make the appropriate lending decision, in accordance with the new regulations.
Paragon’s sister brand Mortgage Trust will service the less complicated cases.
John Heron, managing director of Paragon Mortgages, commented: “Currently, many lenders focus mainly on the rental income and value of the property they are lending against when underwriting buy-to-let property.
“At Paragon, we’ve always asked for information on all the properties a landlord holds and on the full range of their economic activity so that we can assess their business in the round and consider the impact of the new lending on their performance.
“Against this background, this implementation of the PRA Phase 2 changes should result in minimal change for intermediaries and their customers.”