Online buy-to-let (BTL) mortgage broker Property Master has warned that landlords will struggle to get mortgages as the impact of the coronavirus sees lenders pull product ranges, tighten lending criteria and widen margins.
Angus Stewart, chief executive at Property Master, said: “The competitive and attractive buy-to-let mortgage market appears to be going into reverse as the impact of the coronavirus begins to bite.
“Landlords are finding that their borrowing options are being drastically reduced as lenders respond to this new record low base rate environment and fears of falling house prices by withdrawing entire product ranges.
“We have had clients mid-way through a mortgage application only to find the process is halted and the product withdrawn before they can reach completion and the release of funds.
“We can well imagine the difficulties lenders are facing when it comes to valuing properties and properly pricing risk.
“But we would urge them to continue to support landlord customers, especially those who were moving successfully through the mortgage application process and would otherwise have expected to be shortly in receipt of a loan.
“Similarly, we would urge banks to stand by the commitment made by the government to provide payment holidays to landlord customers struggling as the current crisis impacts on the ability of tenants to pay their rent.”
Since the Bank of England cut the base rate on 11 March, some lenders have chosen to exit the BTL mortgage market altogether for the foreseeable future.
Saffron Building Society, which offered a range of mortgages including for portfolio and limited company landlords, currently has no products available saying only that its product range is “under review”.
The Melton Mowbray Building Society and Vida Homeloans have followed suit.
Together Money have suspended lending in both the BTL and residential market.
Barclays have withdrawn all their products for portfolio landlords.
Tracker BTL mortgages are also being taken off the market, with The Mortgage Works and HSBC both withdrawing their tracker mortgages.
Kensington Mortgages has also reduced their maximum LTV lending criteria down from 85% to 75%.
Stewart added: “In recent years the BTL market has been characterised by increased competition amongst lenders leading to lower pricing and new, innovative products.
“We are urging the banks now to continue in that vein and support landlord customers as they deal with this really difficult situation.”