The spread between the average maximum and minimum loan amount available to buy-to-let (BTL) mortgage applicants is more than double the spread in the residential market, new analysis has revealed.

Data from Mortgage Broker Tools (MBT) showed that the average maximum loan available to residential customers in February was £235,475, whereas the average minimum loan was £136,000 – representing a spread of £99,475.

For BTL customers, however, the average maximum loan was £346,153, while the average minimum loan was £131,687. This equates to an affordability spread of £214,466, more than twice the spread in the residential market.

Analysis of cases processed through the MBT Affordability platform found that while the residential market has seen frequent change in the affordability landscape, BTL affordability has remained relatively stable.

However, MBT suggested the large spread between the average maximum and minimum available loans has put “greater emphasis” on choosing the right lender to match a client’s loan requirements.

“This data from MBT Affordability shows that the choice of lender for a BTL client can make a huge difference to the size of loan they are able to access,” commented MBT CEO, Tanya Toumadj.

“Many investors are keen to maximise their leverage to make greater use of their capital, so it’s important that brokers are able to easily identify those lenders that can provide larger loan sizes for BTL clients. Choosing the wrong lender could limit a landlord’s options and have a significant impact on the success of their investment strategy.

“So, carrying out thorough affordability research is just as important in the BTL market as it is for residential clients – if not more so. The affordability landscape may be more stable in this part of the market, with fewer tweaks and changes to calculations, but the consequences of not choosing the right lender are more significant.”

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