Shawbrook Bank

More client education needed on PRA rule changes, claims report

A new report has revealed that there is a lack of awareness among property investors regarding the PRA rule changes to buy-to-let mortgage applications.

The latest edition of Shawbrook Bank’s annual broker barometer found that 28% of brokers surveyed said that their clients were not aware of the changes at all.

Three-fifths of brokers (61%) reported that while their clients were aware of the rules, they lacked enough understanding of the changes that were made, specifically those made to underwriting standards for buy-to-let properties.

Karen Bennett, managing director of commercial mortgages at Shawbrook Bank (pictured above), said: “The broker barometer has highlighted the critical need for more education in the investor market regarding the impacts of regulatory change.

“The benefits of increased awareness are two-fold.

“First, it should help prevent clients from sleepwalking into a problem and allow them to adjust their investment strategy accordingly.

“Second, according to our research, brokers are also seeing increased enquiries from landlords, which demonstrates that the value of professional advice should never be underestimated and that there are still opportunities for business growth.”

The report also found that 44% of brokers saw an increase in portfolio landlords approaching them following the PRA changes, while 58% said the changes should help their business.

Karen concluded: “We aim to continue to support the broker community with information on all aspects of the regulatory landscape moving forward, and look forward to working with industry bodies such as the NACFB in this regard.”

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