Concerning new research from Kent Reliance has found that nearly half of UK brokers are not comfortable that they fully understand what upcoming PRA changes for portfolio landlords entail.
As a result, they are unsure what it will mean for their business.
The changes were announced in September 2016 and will see a new minimum underwriting standard introduced for landlords with four or more properties. These alterations will come into force on the 1st October 2017 and under these rules, portfolio landlords and their brokers must provide information on their cash flows and costs derived from multiple tenancies.
Worryingly, with less than one month to go until the deadline, the survey of over 200 buy-to-let brokers discovered that 46% still do not understand their full obligations.
13% admitted they were unsure of when the changes came into force, while 31% had heard of the rules but did not fully understand how to apply them to their business.
Of those brokers already in the know, 29% said that the alterations will increase future opportunities. This was in comparison to just 14% who feel the changes will reduce overall buy-to-let transactions.
In addition, many buy-to-let brokers feel that there will be some initial teething pains. 29% said that more applications will be rejected in the short-term, while 23% think the greater administrative burden could cause the process to slow down. Only 4% suggest that there will be no impact at all.
Adrian Moloney, Sales Director at OneSavings Bank, observed: ‘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.’