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    I am more than ever glad I remortgaged everything with lending a while ago (for 5 years).
    Time for the dust to settle before I need to consider what to do then.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      Originally posted by jpkeates View Post
      I am more than ever glad I remortgaged everything with lending a while ago (for 5 years).
      Time for the dust to settle before I need to consider what to do then.
      One of my properties fixed deals comes to an end March 19. That's going to be fun - not!

      Comment



        Barclays already assess BTL affordability by undertaking a personal solvency review and detailed affordability assessment of the borrower however they have this morning made the following announcement to the Intermediary market.

        From 19 September 2017, your clients will be allowed a maximum of 6 mortgaged BTL / permission-to-let (PTL) properties with us, and a maximum of 10 mortgaged BTL / PTL properties across all lenders (including us).

        Comment


          Here is a summary of a survey published in Mortgage Trade Publication relating to the PRA Changes

          Just 54% of brokers are comfortable that they fully understand what the upcoming PRA changes for portfolio landlords entail, and what they will mean for their business, according to research from Kent Reliance.

          The changes will see a new minimum underwriting standard introduced for landlords with four or more properties as of 1st October 2017. Under the new rules, portfolio landlords, and their brokers, will need to provide detailed information on the cash flows and costs arising from multiple tenancies.

          However, with less than a month until the deadline, the survey of more than 200 buy-to-let brokers found that 46% still don’t understand everything they need to. 13% admitted that they were aware of the changes but not when they are coming into effect, while nearly a third (31%) had heard of the new rules but didn’t fully understand how to apply them to their business and just 2% had not heard of them.

          Those brokers that are already in the know are optimistic about the opportunities the new framework will create. A third (29%) believe the PRA rules will increase future opportunities compared to 14% who think it will reduce overall buy-to-let transactions.

          Whatever the eventual outcome, some teething pains are expected. A third (29%) anticipate that more applications will be rejected in the short term, a quarter (23%) believe the extra administrative burden will cause the application process to slow down, with just 4% predicting that it will have no impact at all.

          Comment


            I am making the following comment as I have just completed two full property appraisals in advance of making loan applications for clients.

            May I respectfully make one word of caution for Portfolio Landlords affected by the PRA changes: .Lenders when assessing the portfolio will undertake Automated Valuations of such properties , from experience these are not always 100% accurate and in a number of instances have been found to understate the valuations so it it is important when compiling your spreadsheet that the figures are stated as accurately as is possible. I mention this purely because there is sometimes an inclination on the part of the investor for the overstating of property values in order to boost the respective Loan to Values, todate these have been seldom challenged as the lenders have been only interested in the subject property but now that everything is under the microscope care needs to be given.

            Comment


              Originally posted by loanarranger View Post
              Barclays already assess BTL affordability by undertaking a personal solvency review and detailed affordability assessment of the borrower however they have this morning made the following announcement to the Intermediary market.

              From 19 September 2017, your clients will be allowed a maximum of 6 mortgaged BTL / permission-to-let (PTL) properties with us, and a maximum of 10 mortgaged BTL / PTL properties across all lenders (including us).
              I have an application going through with them at the moment. I'm very nervous it won't get agreed before end of September.

              This is will be my 4th purchase so I come under PRA. Was hoping to get it all agreed before then.

              They seem to be really busy at the moment.

              If I get rejected I'm guessing there won't be time to get something agreed elsewhere?

              Comment


                As the old phrase says "Don't panic Mr Mainwaring"
                if your application has been accepted and in the system then you have little to fear. The fact that the announcement states "From the 19th" means new applications received.

                Comment


                  Godiva has this afternoon published their revised criteria for Portfolio Landlords which are with immediate effect. There certain additional qualifying points which they have included not least of which is the minimum period of ownership of the first BtL property.

                  A portfolio landlord is/are clients with four or more Buy to Let mortgaged properties, either together or separately, in total.
                  Specific criteria includes:
                  • We assess all the properties in the portfolio in all cases. This means that you must provide us with information that includes the value of each mortgage, monthly mortgage repayments, monthly rental amounts and estimated property values. You'll also need to give us full details of any unencumbered BTL properties.
                  • There should be a maximum LTV of 65% across the whole portfolio. This calculation will include properties that are unencumbered and the property they're applying for.
                  • The minimum ICR across the whole portfolio, including properties mortgaged with other lenders, should be 125% (based on a reference rate currently of 5.5%). This calculation includes properties that are unencumbered and the property they’re applying for.
                  • No single property should be below an ICR of 100%.
                  • Portfolio landlords must have acquired their first BTL property more than 24 months before the current application. No more than three properties (prior to the current application) should have been acquired within the last 12 months.
                  If anyone has any queries please let me know.

                  Comment


                    Originally posted by loanarranger View Post
                    As the old phrase says "Don't panic Mr Mainwaring"
                    if your application has been accepted and in the system then you have little to fear. The fact that the announcement states "From the 19th" means new applications received.
                    Thanks. It just seems to be taking a long time to progress. I'm guessing they're all very busy at the moment. I'd imagine a flood of applications before PRA kicks in.

                    Just got news they've booked the survey for Tuesday so that's good news at least. I presume the underwritters review the application first and then the survey gets booked.

                    Comment


                      Not necessarily, each lender operates differently. In the main they make the assumption that everything as declared on the DIP and full application can be supported and will meet their criteria, so instructions are immediately passed to the valuer.

                      Barclays have in my experience never been swift in their processing and I wouldn't put the delays down to volume receipt of business, if it is then they are in the minority of lenders as my In-Box is full of marketing hype from lenders suggesting that they have USP's for brokers to place business with them over other lenders.

                      Relax and let your application get processed including the valuation; most surveyors are obliged to return their reports within 72 hours of doing the inspection.

                      Comment


                        The following article appeared in one of my Trade Magazines and is relevant to the London property investment market.

                        The number of London buy-to-let investors has fallen by a third in the last year, according to a property asset manager.

                        Within London Central Portfolio’s (LCP) managed client portfolio, the number of buy-to-let investors has seen a significant decrease over the last 12 months, with its share of purchases falling from 85% to 55%.

                        Purchase activity has been much slower in the ‘£1m and under’ sector, which is largely dominated by these buyers. The sector saw a 9.4% decrease in sales in Q2 and the average purchase price for rental investors has fallen 27% to £816,429 over the last year.

                        LCP said homebuyers, increasingly attracted by discounted luxury property, now represent 45% of all purchases in Prime Central London (PCL), and have tripled their share over the preceding year.

                        This is reflected in swelling numbers of luxury sales, with a 23% increase in activity in Q2 in the £5m – £10m bracket. Houses in trophy addresses have become much more popular, with a 4.1% increase in sales and a 4.9% increase in average prices in Q2.

                        According to Land Registry data, average prices in PCL reached £1.9m following quarterly growth of 5.8%, boosted by a handful of high value sales. Transactions have remained at very low levels with just 3,750 sales over the last 12 months.

                        The number of flat sales has fallen 11% and prices have increased by just 2.6%.

                        LCP said the “desertion” of PCL’s new build sector continues, reflected in a 55% decrease in sales in Q2, compared with 9% for the PCL market overall.

                        Buyers from the Far East Asia are the biggest buyers, making up 36% of purchases over the last 12 months, followed by Indian and Middle Eastern buyers at 22% and 21% respectively.

                        Naomi Heaton, CEO of London Central Portfolio, said: “As international homebuyers identify attractive discounts on top-end properties, particularly as Sterling remains weak, they have actively re-entered the market, snapping up deals in London’s best addresses.

                        In stark contrast, buy to let investors have remained on the side-lines trying to call the bottom of the market, resulting in a much-reduced share of purchases”.

                        Comment


                          The following ( part of a more comprehensive briefing note) was received from BM Solutions. Clearly for those who leave their tax submissions to 31st January this change could be problematic .
                          ” To ensure you continue to comply with our policy that the most recent Tax Assessments (SA302s) and corresponding Tax Year Overviews are no more than 18 months old, please note that for all applications fully submitted from 5 October 2017 the latest Tax Assessments and Tax Year Overviews must be for tax year 2016/2017.

                          There’s no change to self-employed income verification and you should continue to follow the existing process.

                          Comment


                            The Paragon Group, the parent company of Paragon Mortgages and Mortgage Trust, has announced a strategic reorganisation and will now be known as Paragon Banking Group.

                            All of the Group's lending and operating activities, together with the majority of its loan portfolio, now sits within Paragon Bank.

                            The move follows PRA and FCA approval and reflect the Group’s strategy to source the majority of its funding from the retail deposit market going forward.

                            The Group says the reorganisation reflects the "changing focus towards becoming a fully integrated banking business" and will include realigning Paragon’s mortgage products under the refreshed brand
                            John Heron, who will continue to lead the Group’s mortgage business as Managing Director – Mortgages and as an Executive Director at Paragon, said: “This is an important milestone and a positive development for our customers and intermediaries. By bringing more of our business into the banking framework, we can use our capital more efficiently and simplify our operating structure enabling us to offer better products, more competitive pricing and better service going forward








                            Comment


                              We are presently in the silly season, I have noticed that despite the imminent increases in interest rates , a number of Buy to Let lenders have announced attractive rates particularly for 5 year fixed rates , furthermore brokers are receiving missives from lenders advising on their individual approaches to underwriting applications which fall within the new PRA rules. Clearly for many they are seeking to build their pipeline of new business in the expectations that funding costs might prove prohibitive in 2018.

                              If anyone is considering a new purchase or indeed a refinnce of an existing Buy to Let , might I suggest you speak with your broker even if it is three /four months before the current deal comes to an end given that the validity period is normally 3 months.

                              Comment


                                Originally posted by loanarranger View Post
                                Clearly for many they are seeking to build their pipeline of new business in the expectations that funding costs might prove prohibitive in 2018.
                                Can you explain that differently please, not sure what you mean.

                                Comment

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