Specialist lending filling funding gap for investors and landlords

  • 26/05/2017
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Specialist lending filling funding gap for investors and landlords
Landlords and other property investors have been turning towards the specialist lending sector as securing mainstream funding becomes more difficult.

Despite these challenges many investors and landlords are still planning to expand their property portfolio in 2017.

Three quarters of 82 property investors surveyed intended to expand their portfolio in 2017, with 67% targeting London and 33% looking to buy in the South East.

A similar number also said they raised alternative finance in the past year after struggling to obtain mainstream funding.


Affordability barrier

The MTF Property Investor Survey found that 44% cited affordability as the main barrier to getting mainstream funding, followed by adverse credit (34%) and strict lending criteria (22%).

However, 47% of investors got a secured loan as an alternative, while 39% opted for a bridging loan.

Unsurprisingly, a majority of respondents said scrapping the additional 3% stamp duty hike on buy-to-let and second homes would be the best way the UK government could improve the private rented sector.

MTF director Tomer Aboody said: “The results from our Q1 Property Investor Survey reflect the impact of stricter affordability and stress testing from lenders on professional property investors’ ability to obtain mainstream funding.

“It’s certainly been a tough 18 months for landlords but alternative lenders are stepping in to meet the needs of borrowers.”

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