Over a third of property investors want buy-to-let lenders to apply a manual underwriting process for professional landlords, as they struggle to obtain buy-to-let mortgages from larger high street lenders, MT Finance has revealed.
The results from MT Finance’s latest Property Investor Survey found that almost half (42 per cent) of property investors said they had struggled to secure a mainstream buy-to-let mortgage in the last 12 months, with 54 per cent claiming the affordability criteria was the primary barrier. Following behind was age restrictions at 32 per cent and insufficient deposit capital at 14 per cent.
However, 46 per cent of those who were not accepted for a buy-to-let mortgage filled the funding gap with additional sources of liquidity, with 50 per cent opting for bridging loans, 34 per cent refinanced through a specialist lender and 16 per cent chose a secured loan.
As a result of this, a majority (58 per cent) of property investors surveyed do not think buy-to-let lenders are doing enough to support the industry.
When asked what mainstream buy-to-let lenders could do to better support them, 36 per cent said applying a manual underwriting process for professional landlords would better support them, followed by increasing loan-to-value thresholds at 32 per cent and relaxing age restrictions at 26 per cent.
Commenting, MT Finance commercial director Gareth Lewis said: “The results from our Q1 2019 Property Investor Survey reflects the impact of stricter affordability and stress testing from high-street lenders on professional property investors’ ability to obtain mainstream funding.
“The need for reliable, transparent, and quick access to funds is ever-critical and specialist finance- such as bridging loans, will continue to pick up when a more personalised approach to underwriting is required.
“With highly professional specialist lenders offering flexible products at competitive rates, bridging finance has become an attractive proposition to those property investors who are looking to expand their portfolio and need certainty when conducting their business and who often need to move swiftly to capitalise on an opportunity.”
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