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The Coventry announces its approach to portfolio landlords.

01 August 2017

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In advance of the PRA’s new underwriting rules, the Coventry for intermediaries has announced how it will lend to portfolio landlords when the changes are rolled out in September.

Kevin Purvey, Director of Intermediaries says:

“We want to make sure intermediaries are fully prepared so we’re announcing our approach to portfolio landlords well in advance. The good news is that all of our existing BTL criteria will still apply to the property being applied for, such as minimum ICR, maximum number of BTL mortgages per household and LTV limit. However, there are some additional criteria that we’ll start implementing from 14 September 2017.”

Our definition:

A portfolio landlord is a client who has four or more buy to let mortgaged properties, either individually and/or jointly.

What’s changing?

  • All the properties in the portfolio will have to be assessed in every portfolio landlord case. This means that intermediaries must provide information that includes the value of each mortgage, monthly mortgage repayments, monthly rental amounts and estimated property values. You’ll also have to provide full details of any unencumbered BTL properties in the portfolio. This information will be validated and assessed by a dedicated team of portfolio underwriters.

  • There should be a maximum LTV of 65% across the whole portfolio. The calculation will include properties that are unencumbered and the property your client is applying for.

  • The minimum ICR across the whole portfolio, including properties mortgaged with other lenders, should be 125% (based on a reference rate of 5.5%). The calculation will include properties that are unencumbered and the property your client is 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.

“The guidelines say we must apply a specialist underwriting approach, but we’ve tried to keep our criteria and our processes as straightforward as possible,” says Kevin Purvey. “And if intermediaries have any questions, they can call us on 0800 121 7788 and we’ll be happy to help.”

For the full policy and details of the application process, go to https://www.coventrybuildingsociety.co.uk/intermediaries

For details of other lenders BTL rental calculations and portfolio lending decisions check out L&G’s Matrix here.


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