Almost half (46%) of buy-to-let brokers are still unaware of all they need to know about the upcoming PRA changes (Prudential Regulation Authority) for portfolio landlords, found new research from Kent Reliance, which is part of specialist lending group OneSavings Bank (OSB).
Half of Buy-to-Let Brokers still Unaware of PRA Changes
The PRA changes, which were announced in September 2016, will see a new minimum underwriting standard being introduced for landlords with four or more mortgaged buy-to-let properties from 30th September 2017.
Under the 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 less than a month to go until the deadline, the survey of more than 200 buy-to-let brokers found that 46% still don’t understand everything they need to. One in ten (13%) admitted that they were aware of the changes, but not when they are coming into effect, while nearly a third (31%) had heard of the new PRA changes, but didn’t fully understand how to apply them to their business, and just 2% hadn’t heard of them.
Those brokers that are already in the know are optimistic about the opportunities that the new framework will create. A third (29%) believe the PRA changes will increase future opportunities, compared to 14% who think that they will reduce overall buy-to-let transactions.
Whatever the eventual outcome, some teething pains are expected. A third (29%) of brokers anticipate that more applications will be rejected in the short-term, a quarter (23%) believe that the extra administrative burden will cause the application process to slow down, with just 4% predicting that it will have no impact at all.
Adrian Moloney, the Sales Director of OSB, says: “Brokers have had to get to grips a with a huge amount of regulatory change 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, but, with the PRA deadline looming, now is the time to buff up on the new rules and make sure clients are ready to comply.
“For those that still don’t feel confident in what these changes mean for their business, the time to get on top of it is now, and we would encourage them to contact us as soon as possible so we can make the transition into the new landscape seamless for their business.”
Are you ready for the new rules?