Complex Buy To Let
Stricter buy-to-let affordability checks pushing landlords to specialist loans
Tougher affordability checks on property investors are causing them to seek alternative sources of finance such as second charge and bridging loans.
According to the latest property investor survey conducted by MTF, 57% of 84 property investors quizzed struggled to secure a buy-to-let (BTL) mortgage in the past 12 months.
Two-thirds (62%) citied affordability criteria as the primary barrier to mainstream funding, followed by age restrictions at 20% and insufficient deposit capital at 18%.
However, 43% of the total surveyed were then able to fill the funding gap with other sources of liquidity – 40% of those opting for secured loans and 30% raising bridging finance.
When asked what could mainstream BTL lenders do to improve, 57% of respondents said a more flexible approach to lending was key, 29% said reducing processing times, while 14% said offering better rates.
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Aspiring developers
A Lendinvest survey of aspiring property developers asked what they believed would have the greatest effect on property prices over the next five years.
National economic growth (40%) was voted as most likely to have the greatest impact while only 24% believed political developments, such as further elections and impending Brexit, will affect house price growth the most.
One in five (20%) said housing supply shortage would affect prices most, while 16% of aspiring developers cited the construction of new infrastructure such as the new HS2 and Crossrail lines as the key influencing factor.
LendInvest director of development Steve Larkin was pleased to see the next generation of SME housebuilders were so confident about prospects for the housing market in the medium term. “Typically, we might expect to see more scepticism or concern surrounding the impact of Brexit on the market,” he said.
“Likewise, shortage of supply is the conventional culprit for pushing house prices up.
“Naturally we must wait to see how the economic and political developments of the next year or two unfold. But for now, it’s encouraging to see these aspiring developers taking such a fresh perspective on the market they’re entering,” he added.