Paragon has become the most recent lender to announce that it has changed tact to fall in line with the Bank of England’s Prudential Regulation Authority underwriting standards.
These relate to portfolio landlord with four or more managed properties.
Standards
All buy-to-let lenders must implement these new standards by September 30th. Paragon has moved to act more quickly and will implement their changes from next Monday, the July 17th.
The lender says its decision to implement the changes ahead of the PRA deadline reflects the fact that these new standards require just minimal alterations from its existing approach.
From Monday, brokers will route all applications from portfolio landlords with four or more mortgaged properties exclusively through Paragon Mortgages.
Paragon’s Mortgage Trust service meanwhile will focus on applications from individual landlords with three or less single mortgaged properties.
Paragon moves to tighten rules to meet PRA requirements
Performance
The firm request that all applications are received with a comprehensive property schedule and seek more documentation as necessary. This is in order to understand each investors’ business and can include an asset and liability statement, cashflow details and a business plan for the future.
John Heron, managing director of Paragon Mortgages, said: ‘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.’ {1)
[1] https://www.lettingagenttoday.co.uk/breaking-news/2017/7/another-lender-tightens-rules-for-investors-with-four-or-more-buy-to-lets