An interesting article I read today… a must read for buy to let investors … from Property Wire
Despite choice of 900 buy to let mortgages available on the market, lack of finance is hindering almost a quarter of UK landlords, new research has found.The situation is preventing them from expanding their property portfolios, according to the study conducted by online letting agent Property Let By Us.
Overall one in 10 landlords has had difficulty securing a mortgage over the last 12 months but 82% of landlords have managed to successfully secure a mortgage at a when the buy to let market has been challenging for landlords.
Indeed almost 80% of landlords are reporting rent arrears, nearly a quarter of landlords have served an eviction notice and 7% have had to resort to the courts to evict tenants. The good news is that void periods are down as demand continues to outstrip demand.
‘Securing finance also looks like it is going to get tougher for landlords. A new high street crackdown now means landlords will need a bigger deposit and face tighter checks for a buy to let loan. High Street lenders are introducing strict criteria in a crackdown on the buy to let boom, which is feared to be pushing up house prices across the UK,’ she explained.
‘The amount landlords will be able to borrow is expected to fall by thousands and they are likely to face new tough lending criteria to secure a buy to let loan. Landlords must also prove that they are not wholly reliant on their rental income and that they will also be able to cope with void periods and any repairs to the property,’ she added.
Morris also pointed out that some lenders are introducing new affordability checks, which require landlords to answer such questions as how much they spend on household bills and childcare before they can get a loan.
Lenders may also refuse loans to anyone dependent solely on a rental income and some providers expect applicants to have income of at least £25,000 a year from other sources.
‘Landlords need to thoroughly research lenders and ensure they meet the lending criteria before applying for a mortgage,’ Morris concluded.