A lack of suitable mortgages is holding back the buy-to-let market, according to research. A study by Paragon Mortgages has revealed that only 10 per cent of landlords plan to make property purchases for investment purposes in the first quarter of 2010, and it?s the lack of suitable finance that is holding them back.
The Trends research showed that mortgage finance will continue to be a serious problem for investors in residential property throughout the next 12 months. Landlords reported that it was harder to get mortgage finances in the fourth quarter of last year than it was in the third quarter.
Nearly two-thirds of mortgage applicants looking to expand their portfolio or remortgage said that mortgage finance had been harder to find, reported mortgagesolutions-online.
For those looking to buy property, terraced housing was the most popular choice by far. Just under two-thirds were looking for terraced property; 25 per cent were seeking out semi-detached houses; 20 per cent were looking for flats; and only 10 per cent sought to buy detached houses.
Managing director at Paragon, John Heron, said that landlords were hoping to extend their portfolios as tenant demand was strong and house prices were still soft, making bargains a possibility.
He went on to say: ?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.?
