November 28, 2011
Private Rental Sector Landlords Struggle to Raise Funds
The demand for private rental sector (PRS) properties continues to outweigh supply, but even with the flourishing market buy to let mortgage lenders are still being as strict as ever with regards to their lending criteria. This means that thousands of landlords who want to add to their property portfolios are being denied the chance even though the rental income from the properties they want to buy will easily cover their buy to let mortgage payments.
According to recent figures released by the Council of Mortgage Lenders, Quarter 3 of this year (2011) saw a 16% rise in the number of buy to let mortgages being approved, when compared to the figures from Quarter 2. This data looks promising until you see that the number of applications rose by nearly 20%.
When asked why it is that landlords are struggling to gain approval for buy to let mortgages even though the rental market is so strong Graham Kinnear, the managing director of Landlord Assist commented “despite the recent increase in the number of buy to let mortgages available to landlords it appears that the type of property that will be accepted, together with the onerous deposit and lending conditions, means that fewer applications than previously can tick all of the boxes.”
Whether the mortgage lenders will relax their lending criteria in the future is anyone’s guess but at the present time it seems they are happy to lend only when they really want to.
