Landlords are Looking to Expand Their Portfolios
Despite the difficulty in securing the buy-to-let loans, property investors show interest in expanding their portfolio in the first Quarter of 2010.
Paragon Mortgages has done its latest survey based on 200 landlords and found that 10% are looking to purchase more properties to expand their investment from now until March. Of those who are interested, the majority of them (65%) would like to invest in a terraced property; followed by 25% looking into semi-detached houses; while 20% and 10% of them would like to look into flats and detached properties respectively.
However, the research also revealed that 67% of those landlords who had applied for a mortgage due to portfolio expansion or remortgaging purposes found it more difficult to secure mortgage finance during the 4th Quarter in 2009 compared to the previous three months; which means, mortgage finance will remain a serious issue for the private let property investors in 2010.
John Heron, managing director of Paragon Mortgages, said, “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.”
“It is ironic that the criteria employed by most lenders favours inexperienced landlords over those with proven track records in residential property investment and management”, he stated.