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In our new interview with Stephen Johnson, M.D. of Shawbrook Bank, we cover a lot of ground.Stephen talks about the wider implications of the PRA, how landlords need to adjust to the new environment, and why they should be feeling optimistic about the future:A reminder of our Ready-made deal stacking calculations for the new tougher stress tests.It is interesting to hear how the market will affect existing portfolio landlords differently to new entrants into the sector.SEE ALSO - Understanding the impact of PRA on landlordsUP NEXT - Government policy > exacerbate housing crisisDON'T MISS - Landlord of 29 years faces up to Section 24NOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I have been talking to brokers and lenders today and they are both saying the same thing.Lenders are withdrawing from the "portfolio landlord" space - landlords with 4 or more properties by PRA definition. They don't want the hassle of the massive fact find.There are only a handful of lenders who will now consider lending to landlords with four or more properties. The others are turning the business away. I believe this will make it hard for landlords to grow a portfolio.The role of the broker is now increasingly important for two reasons:1. Landlords will not call multiple brokers due to the huge fact find necessary. They will have to decide to work with one broker.2. They will have to work with brokers with their fingers on the pulse who will know all the lenders and where the client's profile fits, otherwise they will get turned down for lending.The game has changed a lot more than people realise.Many brokers are in the dark about the new rules and the different lender criteria and interpretation of them. A specialist broker is more vital than ever now.See - PRA will make S24 look like walk in the park"A specialist broker has never been so vital"
Up-date for this thread:New Precise Mortgages proposition - portfolio landlords
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Landlords showed extreme resilience in 2017, new data has revealed, with 57% of the mortgage applications received by Accord Buy To Let coming from those affected by new regulation.
Despite Accord only introducing new criteria for landlords in September 2017, it saw a large influx of applications (32%) from portfolio landlords with four or more properties.
Meanwhile, 18% of the applications Accord received since April 2017 were from single property landlords in locations where they or their relatives have previously lived.Full/source article
Nearly three quarters of portfolio landlords have found it more difficult to secure a mortgage since the Prudential Regulation Authority’s changes were introduced last year.
This is the key finding from research for Foundation Home Loans by BDRC Continental.
When asked how they had been affected by the PRA regulatory changes, 70 per cent of UK landlords with over four buy to let mortgages said they had found obtaining finance a challenge since the regulation came into effect on September 30. Full/source article
I can see many LL reducing their portfolio to three properties.
They will have substantially deleveraged the mortgage debt on the remaining 3 properties so shouldn't then have any problems remortgaging.
SVR are not sustainable for many LL especially with S24 affecting those LL.
It would be interesting to know at what overall portfolio ltv those who are struggling with mortgages since PRA came in are operating at.
There has never been a more important time to have a good yield low yield and your sunk
Learn Change and Adapt ?????