"We are mindful that the PRA has created a clear distinction between portfolio and non-portfolio landlords, and as such, we will have different underwriting policies for both."
From 1st October, Keystone will pay 0.7% to directly authorised brokers in response to the increased workload faced after the introduction of new PRA guidelines on underwriting buy-to-let mortgage applications from portfolio landlords.
The increased proc fee will be applied to all Classic Range cases even if the client does not meet the portfolio status definition.
The PRA defines a portfolio landlord as a borrower with four or more distinct mortgaged buy-to-let properties, either together or separately, in aggregate.
From October, lenders will be required to adopt a specialist underwriting approach which includes gathering more detailed information than lenders may have previously requested.
In practice, this means that Keystone may request more detailed information from portfolio landlords to help make the appropriate lending decision. For brokers this will mean that they will have to spend considerably more time working closely with their clients to collect and collate the necessary paperwork before being able to submit a case.
David Whittaker, CEO of Keystone, said: "We’ve always focused on the more professional landlord with complex borrowing requirements, so in a sense, it will be business as usual for us as we already take a specialist approach to underwriting.
"However, we are mindful that the PRA has created a clear distinction between portfolio and non-portfolio landlords, and as such, we will have different underwriting policies for both.
"As a lender, it’s important to us that we both acknowledge and reward the additional legwork being undertaken, and we will keep proc fees under review whilst the new processes are bedding in.
"In the meantime, we are working hard to reduce the impact on brokers and landlords. We have some new tools in the pipeline to help streamline the process for brokers and we are determined to ensure that service levels are maintained as the market adjusts to the new environment."
