View more on these topics

Buy-to-Let Watch: Brokers were never more important

Ying tan buy-to-let sector

With the second round of PRA rules coming into effect next month, buy-to-let brokers have never been more important to their clients

As we head towards yet another shake-up of the buy-to-let sector, it’s understandable that brokers and consumers are feeling somewhat nervous.

As adaptable as this market may be, the amount of ‘adapting’ we’ve had to do of late would test any sector. Now, with the second round of Prudential Regulation Authority rules coming into effect next month, there is a definite air of concern in the industry.

From 30 September, lenders will have to pay greater attention to affordability for portfolio landlords, including assessing rental coverage for the rest of the properties within the portfolio. This may result in longer processing times as lenders get to grips with the new requirements and may also cause confusion among borrowers over which information and documentation they need to supply.

Communication and education will be imperative here. Ahead of April’s changes to landlord tax relief one thing became clear: many landlords had not got to grips with how the changes would affect them. Indeed, according to Paragon’s latest Private Rental Sector Trends Report, while the number of landlords who understand the tax changes has risen to 88 per cent (up from 71 per cent six months ago), this still means 12 per cent of landlords do not understand – despite the cuts to tax relief having begun. We cannot have the same thing happen with the PRA rule changes.

Thankfully, several lenders have revealed how their approach to portfolio landlords will change next month – including Accord and Santander – while Paragon has already implemented the new rules. However, we are just weeks from the introduction of the regulation, so the rest of the lending community needs to come forward with more details – now.

The longer lenders wait before announcing their plans, the less prepared brokers will be. It seems some lenders are waiting to see what their competitors do, but brokers need clarity.

And, of course, brokers need to play their part in educating clients. Make sure you’re up to speed with the changes taking place; talk to lender BDMs to get a sound grasp of their approach.

Never have buy-to-let brokers been more important to their clients.

Ying Tan is managing director of Buy to Let Club

Recommended

Whittaker_David_2015
1

Buy-to-let Watch: Brokers need a pay rise

Whilst there might be room to increase rates, brokers also need a pay rise We have now heard from four lenders on how they intend to approach the specialist underwriting requirements for portfolio landlords come October when the second part of the PRA’s new regime kicks in. At the back end of June, The Mortgage […]

Buy-to-Let Watch: The deposit cap just does not fit

If there’s a risk that can’t be mitigated with a higher deposit thanks to new rules, landlords will stop letting altogether Risk. It’s one of the most important factors in any business strategy and particularly in the finance sector. Indeed, the regulator and the Government want the industry to pay huge consideration to it. Following […]

1

Buy-to-let needs fresh ideas: Jeff Knight

Confidence within BTL has taken a hit but it is up to the industry to inject some fresh energy and competitive ideas The buy-to-let market is more exciting today than it has ever been. Despite some regulatory burdens on landlords, particularly those with larger portfolios, there is huge opportunity and increasing competition spurring things on. […]

Globe - thumbnail

Considerations for overseas workers in Germany

With Germany’s strong economic growth leading the eurozone’s recovery, many UK businesses are keen to be part of the success story: recent data shows that there are currently more than 280,000* employees working for a UK-controlled company in the country.

Newsletter

News and expert analysis straight to your inbox

Sign up