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TODAY'S OTHER NEWS

Landlords face battle to get buy-to-let finance

Landlords are struggling to cash in on the buy-to-let boom because of growing difficulties getting mortgage finance, new research has found.

One in four landlords report problems getting buy-to-let mortgages to expand their portfolios, despite a choice of more than 900 deals on the market.

The new study, by online letting agent Property Let By Us, also showed that landlords are facing growing rent arrears and increasingly having to evict tenants through the courts.

Jane Morris, managing director of the lettings website, warned that securing finance is set to get tougher for landlords.

“A new high street crackdown now means landlords will need a bigger deposit and face tighter checks for a buy-to-let loan.

“High street lenders are introducing strict criteria in a crackdown on the buy-to-let boom, which is feared to be pushing up house prices across the UK.”

Morris said the amount landlords will be able to borrow is expected to fall by thousands and they are likely to face new tough lending criteria.

“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."

She said 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.

“Landlords need to thoroughly research lenders and ensure they meet the lending criteria before applying for a mortgage,” she added.

The research also showed that landlords face growing rent arrears, with nearly a quarter serving an eviction notice and 7% resorting to the courts to evict tenants.

Morris said: "Spiralling rents are great news for yields, but the downside is that it brings a higher risk of rent arrears."

The good news is that void periods are down as demand continues to outstrip supply, she said. 

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