- 9 in 10 brokers believe the PRA portfolio landlord changes landing on 1st October will impact their buy to let clients
- 1 in 5 have spoken to their existing clients about the new regulations, but many more have yet to do so
- As deadline day approaches, now is the perfect opportunity for brokers to engage
One in five (22%) brokers have spoken to existing clients about the PRA portfolio changes landing on Sunday 1st October, but with 78% yet to do so, deadline day is an ideal opportunity to engage, according to new research from Kent Reliance, part of the specialist lending group OneSavings Bank (OSB).
The regulations introduce new underwriting requirements for buy to let landlords with four or more mortgaged properties, and require landlords, through their brokers, to provide detailed financial information on the properties within their portfolios.
The changes are widely expected to be a good thing for the ongoing sustainability of the private rental sector and lead to further professionalisation, but many landlords are unclear what the changes mean for them. Indeed while 92% of brokers believe their buy to let landlord clients will be affected, the findings suggest the message is still trickling through to the end borrower.
A lack of clarity over what the new regulations mean could be one of the factors preventing brokers from advising their clients on how to prepare. When asked about their own understanding of the new rules, just under half (46%) of brokers admitted that they don’t fully understand what the changes mean for their business.
The good news is that most brokers are taking action to improve their knowledge on the upcoming changes. Over half (52%) of brokers have been in touch with lenders to establish what their plans are, while two in five (39%) have been in contact with third parties such as lawyers, surveyors and accountants as they prepare for the new rules.
Adrian Moloney, Sales Director at OneSavings Bank, said: “Deadline day is here. If brokers haven’t already been in contact with their clients regarding the upcoming changes, and advised them on how best to prepare for their implementation, now is a great opportunity to do so.
All landlords with four or more mortgaged properties will now need to submit much more information when applying for a mortgage, but it will be those managing between 6 and 15 properties, and who might not already pay for professional advice, that are going to have the biggest shock. If I were a broker, that’s where I’d be focusing my attention at the moment.
The whole industry has had to move quickly to bed in the PRA’s new rules, coming as they do on the back of a wave of regulatory and tax change in the buy to let market. At Kent Reliance we made a point of announcing our new lending criteria well ahead of the deadline, and have developed a dedicated tech-platform to make it even easier for brokers to do business with us. We’re still expecting the industry to face a bit of a backlog as everyone comes to terms with the changes, but I know we’ve done all we can to make the transition as smooth as possible.”