PRA changes driving brokers to specialist lenders

The survey also found that a notable number of landlords were finding it difficult to come to terms with the changes which went live in October.

AE3 Media, parent company of Specialist Lending Solutions, conducted the research for Kent Reliance among 205 mortgage brokers in February.

One in five brokers said the new PRA guidelines influenced them to use a specialist lender for the first time, while half have started using specialist lenders more often.

One in ten said they planned to use specialist lenders more in the future, 15% had not changed the type of lender they use, and just 2% used specialist lenders less.

Small portfolio difficulties

Kent Reliance, which is part of One Savings Bank, said the research suggested a key reason for this drive towards specialist lenders was due to confusion around the complexities landlords were facing.

It found 44% of brokers believed all their landlord clients were having difficulty adjusting to the changes, with 34% saying that those with four to six properties were having the most difficulty.

The PRA regulations introduced new underwriting requirements for buy to let landlords with four or more mortgaged properties, and require landlords, through their brokers, to provide detailed financial information on the properties within their portfolios.

One Savings Bank sales director Adrian Moloney (pictured) said: “Specialist lenders are uniquely placed to offer greater flexibility than traditional high street providers, so it’s perhaps unsurprising that many brokers have turned to specialists in the months following the PRA regulation changes.

“Although it was always going to be the case that the administrative burden of the PRA regulation would be most harshly felt by brokers and their portfolio landlord customers, many we spoke to in the lead-up to the changes told us that they felt underprepared for its implementation.

“That’s why we introduced our Buy to Let Hub, a dedicated submissions platform, which helps simplify the process and ease some of the load for brokers,” he added.