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 off the high street.
The results from MT Finance’s latest property Investor Survey showed 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 citing affordability criteria as the primary barrier to mainstream funding.
This was followed by age restrictions at 32 per cent and insufficient deposit capital at 14 per cent.
Yet, 46 per cent of those unable to obtain a BTL mortgage filled the funding gap with other sources of liquidity, as 50 per cent of those opted for bridging loans, 34 per cent refinanced through a specialist BTL lender, and 16 per cent opted for a secured loan.
As a result, 58 per cent of the 125 property investors surveyed do not think buy-to-let lenders are doing enough to support them.
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 LTV thresholds at 32 per cent and relaxing age restrictions at 26 per cent.
Gareth Lewis, commercial director at MT Finance, 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.”