PRA changes: driving brokers toward specialist lenders

April 20 2018

  • More than half of brokers (52%) surveyed, said they have used specialist lenders more frequently since the PRA changes came into force
  • 30% of brokers have started using specialist lenders for the first time or intend to do so


The PRA’s new guidelines for portfolio landlords, which came into effect last October, have resulted in a flurry of mortgage brokers using specialist lenders for the first time, new research reveals.


According to the data, brokers are increasingly turning to specialist lenders for portfolio landlord applications: one in five (19%) said that the new PRA guidelines influenced them to use a specialist lender for the first time, while more than half (52%) said they have started using specialist lenders more often. A further 11% say they plan to use specialist lenders more in the future. One in seven (15%) haven’t changed the type of lender they use, and just 2% have used specialist lenders less since the PRA changes came into force. 


The research suggests that a key reason for this drive towards specialist lenders is due to confusion around the complexities that landlords are facing. 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.  44% of brokers suggest all of their landlord clients are having difficulty adjusting to the changes, with 34% saying that those with 4-6 properties are having the most difficulty.


Adrian Moloney, Sales Director at OneSavings Bank, 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.


“We’ve always put brokers at the heart of our business strategy, and we will continue to do all we can to help them navigate this stricter underwriting criteria as painlessly as possible.”