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More and more landlords are finding it difficult to remortgage or purchase unusual property types such as Houses of Multiple Occupation (HMO) and flats above commercial premises. These were the findings from a recent buy-to-let survey conducted by the finance experts at Money For My Business.
The survey, carried out amongst professional landlords with portfolios of more than five properties, highlighted a widespread concern with regards to raising finance on unusual property types due to the current lack of interest and restrictive policies of the remaining buy to let lenders. Over 60% of the landlords surveyed said they wouldn’t consider buying properties such as HMO’s regardless of their rental yield. The main reason offered for this was the lack of finance options available in the current market. All of the landlords surveyed currently own properties, that they felt they would be unable to find a lender willing to accept were they to purchase them in the current economic market.
A further 79% of the landlords said that amongst their existing lenders, some had either ceased offering buy to let mortgages or closed down their UK operations all together. This intimidated all those surveyed and made them more cautious about looking for new purchases or refinancing existing properties.
The survey also asked the landlords about the current values of their portfolio and the equity remaining. All of the landlords said they had experienced a drop in value of their property portfolio but still felt comfortable with the amount of equity remaining and felt that the drop in values was overstated. This is inconsistent with a view that there were some real bargains available due to the current conditions.
When asked about support they had received from their existing lenders when faced with the possibility of void periods, a staggering 84% said that they were very disappointed with their current lenders. To the extent that they would not even consider talking to their lender and would prefer to make alternative arrangements to meet mortgage payments.
Ann-Marie O’Neill of Money for my Business explained:
“The results of the survey certainly make for interesting reading. There is still a great deal of concern in the market from landlords regarding raising finance. This is despite the recent up turn in attitudes by the remaining buy to let lenders. It’s important for landlords not to become despondent with lenders and to keep up to date with new buy to let products and lenders which are slowly being introduced into the market. Now is also a good time to reconsider purchasing unusual or difficult properties as they have never offered such good rental yields and for which there are new lenders willing to offer finance.”
Money For My Business is currently offering UK landlords a free review of their mortgage finance. To access your free review call Money For My Business directly on 0845 034 5120.
0845 034 5120
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