Mortgage lenders and brokers have been too quiet over changes to buy to let lending, according to a trade body.
The National Landlords Association says that despite the significant regulatory changes to lending criteria and the application process for portfolio landlords introduced by the Bank of England over the last 18 months, more than half of landlords were still unaware.
The findings show that just eight per cent of landlords said their lender had been in touch about the changes, with 16 per cent saying they had been contacted by their broker.
Almost seven in 10 landlords said neither their lender nor broker had made contact with them about the changes.
However, the findings show that brokers and lenders may have concentrated their efforts on larger portfolio landlords, with 26 per cent of portfolio landlords saying their broker had been in touch, and nine per cent saying their lender had made contact.
“The [Bank of England’s] Prudential Regulation Authority’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” says Richard Lambert, NLA chief executive.
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” insists Lambert.
“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”.