A survey of 500 landlords suggest that 10 per cent of them have had difficulties in securing a mortgage over the past year, even before the government’s much-publicised crackdown.
The Bank of England has already hinted that excessive lending to fund buy to let purchases could pose a risk to the financial well-being of the country and it says this may have to be addressed by financial tools to limit BTL mortgages.
But the new survey, from letting agency Propertyletbyus, suggests that despite there being some 900 buy to let mortgage products available, some lenders are already restraining would-be landlords.
The agency claims that landlords will need a bigger deposit and face tighter checks.
“Landlords must also prove that they are not wholly reliant on their rental income and that they will also be able to cope with void periods and any repairs to the property. Some lenders are introducing new affordability checks, which require landlords to answer such questions as how much they spend on household bills and childcare before they can get a loan” says an agency spokeswoman.
“Lenders may also refuse loans to anyone dependent solely on a rental income and some providers expect applicants to have income of at least £25,000 a year from other sources.
Landlords need to thoroughly research lenders and ensure they meet the lending criteria before applying for a mortgage” she advises.