Paragon Mortgages’ Trends research revealed that mortgage finance will remain a serious issue for residential property investors in 2010, as landlords reported that it was more difficult to secure mortgage finance during Q4 2009 than in the third quarter.
Almost two-thirds (67%) of those that applied for a mortgage for portfolio expansion or remortgaging purposes said that it was more difficult to secure a mortgage in Q4 2009 than Q3.
Of those looking to purchase, terraced housing is by far the most popular choice of property. Nearly two thirds (65%) said that they would look to purchase a terraced property, followed by semi-detached houses at 25%, flats at 20% and detached properties at 10%.
John Heron, managing director of Paragon Mortgages, said landlords were looking to expand their portfolios because of strong tenant demand and soft house prices which presented the opportunity for bargains.
He added: “However, investors continue to be frustrated by a lack of choice and competition in the buy-to-let mortgage market, which is dominated by just two lenders.
“Most buy-to-let lenders currently active in the market employ aggregate or maximum lending levels, placing a ceiling on the number of properties they will lend against, which makes it difficult for professional landlords to expand portfolios because they are usually already at those lending levels.”
