"Castle Trust has always specialised in larger, more complex buy to let portfolios and so the provisions of SS13/16 are just business as usual for us."
A portfolio landlord is defined as someone with four or more mortgaged buy-to-let properties, which could be properties that are solely or jointly owned by the applicant, and/or by a company in which the applicant has a share.
Castle Trust already includes a portfolio landlord statement as part of its underwriting process and existing approach is therefore already closely aligned with the standards required by the PRA.
Limited companies will be subject to a 125% stress test at 5.5%. For individual applicants, portfolio rental calculations will be stress tested against an ICR of 130% for a one-year term, 135% for a two-year term, 140% for a three-year term and 145% for a four or five-year term.
Matthew Wyles, Group Executive Director at Castle Trust Capital, said: “The PRA’s requirement for underwriters to take a proportionate approach to portfolio landlords, based on their knowledge of the borrower, is simply an articulation of sound commercial lending. Castle Trust has always specialised in larger, more complex buy to let portfolios and so the provisions of SS13/16 are just business as usual for us.
“This said, it is important that we are clear and transparent with the market and so, by laying out our approach and the portfolio rental calculations that we use, we can eliminate any element of doubt.”
