PRA changes enable brokers to offer more guidance to BTL landlords

The imminent Prudential Regulation Authority (PRA) changes grant brokers and advisors more opportunity to provide guidance for buy-to-let landlords who are struggling with a lack of information.

Through the minefield of recent legislation, landlords may need more guidance to understand how new rules may affect their finances and how they are underwritten in the future.

The latest PRA rules – which include important changes to the way lenders underwrite “portfolio” landlords who own four or more properties – will have to be met by September 30.

This puts brokers in a good position, as landlords will see them as a useful knowledge base.

“Anyone looking to invest would want to fully understand the pros and cons of any investment and to plan ahead as much as possible,” Andrew Turner, chief executive at Commercial Trust Limited, advised.

“In the context of the new PRA rules, the lack of clarity of what lenders are doing, and their approach to the changes, is creating confusion for many investors.”

He continued: “We can help identify the most suitable product available for an investor’s circumstances and pinpoint what information a lender will require in order to complete an application under the new rules.”

Uncertainty among those in the buy-to-let industry remains apparent, with some individual lenders announcing changes to meet the new rules, as other firms walk away from offering buy-to-let mortgage products. Some lenders have not made any public changes.

Additionally, lenders that have declared their intention to continue to offer lending to portfolio landlords have taken different approaches to the new rules.

“At Commercial Trust, we work with many lenders and have a clearer picture of what products are available and what information applicants will need to provide, so it is business as usual,” Turner added.

“As with any investment, it is important to make informed decisions and to be as organised as possible. Our advisors are prepared for the changes and can explain how the changes will impact on buy-to-let landlords looking to make further property investment.”