Richard Blanco, London representative for the National Landlord Association, gives a useful update on lending changes for portfolio landlords before looking at the changing face of finance.

1. @nationalandlord @PorticoProp#buytolet

2. PRA Changes
Richard Blanco (NLA)
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3. www.landlords.org.uk
National Landlords Association
www.landlords.org.uk
Lending Changes For Portfolio Landlords
Richard Blanco, NLA Representative
#buytolet

4. CHANGING FACE OF FINANCE
4
• PRA changes in January
2017
– Rental coverage was
125% at 5%
– Now 145% at 5.5%
• Portfolio landlord
criteria from 30 Sep
– 4 or more properties
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5. IMPACT OF STRESS TESTING
5
Yield Max LTV under
old criteria
Max LTV under
new criteria
6% 96% LTV
(theoretically)
75% LTV
5% 80% LTV 63% LTV
4% 64% LTV 50% LTV
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6. AN EXAMPLE…
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• My last purchase was £620k, rented for £2,400
– Max loan I could get was £443k which is 72%
– 125% @ 5.19% (Lender’s SVR)
– £443k x 5.19% x 125% divided by 12 = £2,395
• Maximum loan with new criteria is £361k
– £361k x 5.5% x 145% divided by 12 = £2,399
– 58% loan to value
– Mortgage payment at 1.99% is £599
• Deposit required is £259k instead of £177k
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7. STRESS TESTING WHOLE PORTFOLIO
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• Example of 145% x 5.5% stress test
• Portfolio of £5m
– Loans of £2.75m which is 55% LTV
• Actual figures
– Monthly mortgage payments £5,620
– Monthly rental income £17,460
• Income required to meet stress test £18,250
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8. THANK YOU
8#buytolet