Investors tap alternative funds in buy-to-let struggle

Michael Lloyd

May 10, 2018

Property investors are opting to raise alternative finance after struggling to secure buy-to-let mortgages, the latest property Investor Survey conducted by short-term finance lender, mtf, has found.

Some 57% of 84 property investors struggled to secure a buy-to-let mortgage in the past 12 months, with 62% citing affordability criteria as the primary barrier to mainstream funding. This was followed by age restrictions at 20% and insufficient deposit capital at 18%.

Yet 43% surveyed filled the funding gap with other sources of liquidity, as 40% of those opted for secured loans and 30% raised bridging finance.

Tomer Aboody, director of mtf said: “The results from our Q1 Property Investor Survey reflect the impact of stricter affordability and stress testing from lenders on professional property investors’ ability to obtain mainstream funding.

“However, specialist lenders are stepping in to meet the needs of borrowers and fill the liquidity gap.”

Some 57% thought a more flexible approach to lending was key for mainstream buy-to-let lenders improving. And 29% said a reduction of processing times would be the best improvement, while 14% felt offering better rates would help greatly.

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