Half of BTL brokers still unware of upcoming PRA changes
Just over half (54%) of brokers believe that they fully understand what the PRA’s upcoming portfolio landlord changes entail, according to new research from Kent Reliance.
Part of OneSavings Bank (OSB), Kent Reliance found that while the majority of brokers are fully up to speed, a third (31%) are unsure of what the PRA changes means for their business, with 13% unaware of when the changes kick in.
Initially announced in September 2016, the changes will introduce a new minimum underwriting standard for landlords with four or more properties as of October 1 2017. Under these new rules, portfolio landlords and their brokers will need to provide detailed information on the cash flows and costs arising from multiple tenancies.
However, with the PRA deadline looming, the survey of more than 200 buy-to-let brokers found that 46% still don’t understand everything they need to, with just 2% having not heard of the changes at all.
Adrian Moloney, sales director at OneSavings Bank, said: “Brokers have had to get to grips with a huge amount of regulatory changes over the past 18 months, including seismic changes to mortgage tax relief and stamp duty, so it’s understandable that some are still playing catch up.”
While many brokers foresee more administrative legwork and business uncertainty, 29% believe the new rules will create opportunities and 14% think it will reduce overall buy-to-let transactions.
A third (29%) of brokers anticipate that more applications will be rejected in the short term, and a quarter (23%) believe the extra administrative burden will cause the application process to slow down, with just 4% predicting that it will have no impact at all.
Moloney added: “The new standards are business-as-usual for us as a specialist lender, but we know that brokers are going to have a lot more work on their plates, so we’ve done everything in our power to make life easier.”
“Whether that’s through communicating our new lending criteria well in advance of the changes, or developing a dedicated tech-platform, brokers ease of doing business with us remain a key priority of ours.”