Advisers are lacking details on how lenders will approach the PRA’s new rules – and we don’t need any more uncertainty
As we get closer to the introduction of the PRA’s underwriting changes for portfolio landlord loans at the end of September, I can’t help but feel that the sector is not doing itself any favours.
There appears to be a growing frustration specifically about an ‘information void’, which doesn’t look set to be filled any time soon. While there is plenty of market chatter around how PRA-authorised lenders are going to approach the changes, advisers are lacking the concrete detail on what will happen from October.
Concerns have already been raised about the potential – dare I say, certainty – for logjams as the sector gets used to the new requirements. I’ve also suggested that there may be supply-side issues given that some lenders look less keen than others to continue operating as they have been in the portfolio landlord space.
As time passes, it is becoming increasingly difficult for advisers to have conversations with their portfolio landlord clients about the changes, how lenders are going to approach them, the greater documentation requirements, and how the underwriting process may be elongated.
No wonder there is anticipation of a pre-October spike in business as advisers and clients seek to sort out their financing/refinancing now under the certainty of today’s rules, rather than wait for future uncertainty under the new ones.
Our approach will not change throughout the period, and advisers and their portfolio landlord clients will face the same system and process in October as they do today.
That clearly won’t be the case for other lenders, especially those that won’t be able to rely on the automated processes they have used in the past and will have to work their cases in a far different manner, with much more information to collect and dissect.
In that sense, the growing feeling of disquiet is unsurprising. Certainty is currently in short supply and the sooner that lenders provide advisers with detail on how they intend to approach the new rules, the better for all concerned.
Bob Young is chief executive at Fleet Mortgages