Around a quarter of landlords say they will expand their portfolios in the next 12 months. For those landlords looking to expand, the funding choice is pivotal to future profitability. Most want to use a traditional buy-to-let (BTL) loan to fund their next property purchase but, at least from the end borrower’s perspective, access to BTL is not without its challenges.
Our latest survey of 1,000 landlords (BDRC’s Landlords Panel) has uncovered a series of lender related insights that, they claim, are combining to inhibiting portfolio growth:
• 56% feel that lending criteria is too conservative
• One in five found that their most recent BTL application took more than eight weeks from broker interview to release of funds, the average application journey took six weeks
• One in five reported they had missed out on an investment property in the last 12 months due to the slow processing of a lender
• The same proportion reported that they have reached their lending limit with at least one BTL provider.
The dynamics of securing an investment property are clearly very different from those involved in securing a typical residential property, with landlords often needing to operate within a very narrow window of opportunity, perhaps to secure a property at auction.
BTL lenders who are attuned to the sensitivities of the established or aspiring landlord are best placed to succeed in a market that is predicted to grow further in 2015 and beyond.
Mark Long is director at BDRC Continental