Mortgage lenders and brokers in the UK have failed to fully inform landlords how changes to buy to let lending due to regulatory reform will have an impact on their business.
Over half of landlords, some 55% are still unaware of the significant changes to lending criteria and the application process for portfolio landlords introduced by the Prudential Regulatory Authority (PRA) over the last 18 months.
The findings from a new survey by the National Landlords Association (NLA), reveals that that just 8% of landlords said their lender had been in touch about the changes, with 16% saying they had been contacted by their broker.
Some 68% said that said neither their lender nor broker had made contact with them about the changes and the NLA believes that the lack of communication is unacceptable.
While the survey suggests that brokers and lenders may have concentrated their efforts on larger portfolio landlords, with 26% of portfolio landlords saying their broker had been in touch, and 9% saying their lender had made contact, NLA chief executive officer Richard Lambert still believes the situation if far from ideal.
‘The PRA’s changes will greatly affect the ability of landlords to find new finance and continue to provide good quality affordable housing to those who need it,’ he said.
The NLA says that it’s vital landlords are supported through the changes, having issued broad advice earlier in the year urging landlords to contact their mortgage broker or bank before committing to any new property or finance.
‘We hope that that the reason such a significant number of landlords haven’t been contacted is because their existing deals are simply not yet close to expiry. However, it’s in lenders’ and brokers’ own interests to speak to landlords about the changes sooner rather than later, otherwise it could mean a missed opportunity in terms of new business,’ Lambert explained.
‘If landlords don’t get the right support and information about how the changes will impact their existing loans, then it could mean higher finance costs that many just won’t be able to absorb,’ he added.
