Following last year's regulatory changes 70% of UK landlords with four or more buy-to-let mortgages, also known as portfolio landlords, said they've faced difficulties obtaining finance, according to figures from Foundation Home Loans.
Since 30 September, portfolio landlords' mortgage applications require the lender to look at the landlord's entire portfolio to see if they can afford the loan. This means landlords are having to ensure that all their properties can withstand a strict stress test, if they want to stand the best chance of securing a competitive buy-to-let mortgage deal.
The figures further reveal that 51% of those owning between one and three buy-to-let properties have also found it harder to obtain finance, so it's not only portfolio landlords who have been impacted. Indeed, 48% of landlords who are aware of the stricter regulations think the legislation will slow down the process of securing a mortgage.
Yet, the Prudential Regulation Authority changes have certainly had a harsher influence on portfolio landlords, with two-thirds of those who own over 11 properties believing that the range of mortgage products available to them will be reduced, and 28% believing that the changes will make it more likely for their mortgage application to be rejected. Our own data shows that the majority of providers still offer mortgages for those with four or more properties, but less than half have deals for those with more than 10 properties.
"Whether these figures are to do with a natural period of adjustment or become the new norm remains to be seen," Jeff Knight of Foundation Home Loans said. "Nonetheless, in order to make this as smooth a transition as possible, brokers and lenders must work together to ensure things do not become unnecessarily challenging."
If you're not sure what you need or how to make your portfolio more attractive to providers, why not speak to a mortgage adviser?
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