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Brokers find it increasingly tough to secure buy-to-let mortgages for clients

Buy-to-let mortgages are becoming increasingly hard to secure, new research has revealed. The majority of brokers surveyed in the latest Broker Sentiment Survey said they are finding it more and more difficult to secure loans for their clients.

The survey, conducted by bridging loan lender MTF, found that 84% of brokers were unable to source a buy-to-let mortgage for some of their clients in Q4 2016. More than a quarter (27%) put affordability as the main barrier.

Other reasons for brokers failing to secure buy-to-let mortgages for clients included adverse credit (20%) and consumer buy-to-let regulations (also 20%).


Some 69% of the brokers surveyed said they turned to bridging finance when they were unable to get a buy-to-let mortgage for clients who were in a rush to purchase. Another alternative form of lending was secured loans, which just 8% of brokers opted for.

As a result, bridging finance experienced a good fourth quarter. 31% of brokers saw a rise in bridging loan volume, a rise of 13% on Q3. It was the South East that witnessed the biggest demand for bridging loans of any UK region, rising from 29% in Q3 to 50% in Q4.

The main reasons for bridging loan finance being taken out in Q4 were refurbishment (31%) and aiding development projects (15%). 

Some 69% of the brokers surveyed expect bridging loan volumes to rise further in 2017, with none of those who responded predicting a fall in the year ahead.

The said, brokers are still uncertain about what 2017 will bring for wider market conditions. 38% of brokers said they didn’t know if market conditions would improve in 2017, with 59% pinpointing the economy as their prime concern, while 19% pointed to property prices.

“The results from our Q4 survey reflect the adverse impact of stricter affordability and stress testing from mainstream lenders on professional property investors’ ability to obtain buy-to-let mortgages,” Tomer Aboody, director of MTF, said.

“Despite uncertainty in the wider markets, we expect strong demand for bridging loans to continue in 2017.”


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