Paragon is the latest lender to announce it’s falling in line with Bank of England Prudential Regulation Authority requirements for more thorough underwriting standards for ‘portfolio landlords’ with four or more mortgaged properties.
All buy to let lenders must implement the new standards by September 30; Paragon is acting more quickly and will implement from next Monday, July 17.
The lender says its decision to implement the changes ahead of the PRA deadline reflects the fact that the new standards require only minimal alterations to its existing approach.
As from Monday, brokers will route all applications from portfolio landlords with four or more mortgaged properties exclusively through Paragon Mortgages. In addition, any application from a limited company landlord or from a landlord seeking finance for a House in Multiple Occupation or a Multi-Unit Block should also go to Paragon Mortgages.
Meanwhile Paragon’s Mortgage Trust service will focus on applications from individual landlords with three or fewer, single, self-contained, mortgaged properties.
Paragon Mortgages will continue to request that all applications are accompanied by a comprehensive property schedule and seek additional documentation as required to fully understand each landlord’s business, including an asset and liability statement, cashflow details and a forward-looking business plan.
“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” explains John Heron, the managing director of Paragon Mortgages.