portfolio landlords

Are fewer lenders offering support to portfolio landlords?




Almost half of portfolio landlords (46%) who have submitted a mortgage application since the PRA rule changes have seen a reduction in the number of lenders available to choose from, new research has shown.

However, Paragon’s latest PRS Trends research for Q1 2018 has revealed that 67% of non-portfolio landlords said that there had been no change in lender choice.

The study found that the PRA rules introduced at the end of September 2017 had had a significant impact on the buy-to-let mortgage market.

Eight out of 10 of all landlords (80%) said documentation requirements and lenders’ mortgage processing times had increased.

More than half of landlords with larger portfolios (54%) said that processing times had increased by a lot, while just one-third of smaller-scale landlords shared that view (33%).

Three out of 10 landlords (30%) also said that LTV ratios on offer were lower than before.

John Heron, managing director of mortgages at Paragon (pictured above), said: “The more detailed underwriting required on larger portfolios makes it more difficult for mainstream mortgage lenders to compete successfully for the full spectrum of professional landlord business.

“As a result, we’re seeing a polarisation in the market, with specialist lenders playing to their strengths, adding product features that enhance value for larger-scale landlords and increasing their share of more complex, portfolio business.”

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