Keystone is set to raise procuration fees on buy to let investments to 0.7 per cent.
The lender has made the move to raise fees in recognition of the extra work brokers need to complete for applications from portfolio landlords. Keystone currently pays 0.6 per cent to directly authorized brokers, although some network brokers earn a slightly higher fee.
The changes are set to come into effect from the 1st of October, and will be applicable to the classic range. From October, lenders will need to adopt a more specialised underwriting approach, and will need to gather more detailed information than they have previously.
Keystone chief executive David Whittaker commented on the move: ‘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.”
Whittaker explained this will mean Keystone may request more detailed information from portfolio landlords in order to help make the best lending decision.
He continued: ‘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. 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.’
A statement from Keystone claims that the increased proc fee will be applied to all classic range cases even if the client does not meet the portfolio status definition.
A portfolio landlord is defined by the PRA as a borrower with four or more distinct mortgaged buy to let properties, either together or separately.