Landlords lack knowledge of portfolio buy-to-let changes
There’s a lack of awareness amongst the property investors of the changes that the PRA had made to its portfolio buy-to-let rules at the end of September 2017, Shawbrook’s annual Broker Barometer survey found.
The regulation means lenders need to look closer at the income and affordability of landlords with four or more rental properties.
Some 28% of brokers cited that their clients were not aware of the changes at all. And 61% reported that their clients were aware of the PRA rules themselves, but lacked enough understanding of changes.
This is despite brokers listing the ‘knock on effects of the PRA/FCA regulations’ as the top issue likely to impact their clients in 2018.
Karen Bennett, managing director – commercial mortgages, said: “The Broker Barometer has highlighted the critical need for more education in the investor market regarding the impacts of regulatory change.
“The benefits of increased awareness are two-fold. Firstly, it should help prevent clients from sleepwalking into a problem and allow them to adjust their investment strategy accordingly.
“Secondly, according to our research, brokers are also seeing increased enquiries from landlords which demonstrates that the value of professional advice should never be underestimated and that there are still opportunities for business growth.
“We aim to continue to support the broker community with information on all aspects of the regulatory landscape moving forward, and look forward to working with industry bodies such as the NACFB in this regard.”
Brokers surveyed however reported that the changes to regulation are having a positive impact on business. Some 44% of brokers reported an increase in portfolio landlords approaching them following the changes to the PRA requirements.
And 58% of brokers believed the changes should help their business, particularly as landlords seek further guidance on the changes. This highlights the value placed by investors on specialist professional advice.