Fewer Buy-to-Let Mortgages Available as Lenders Drop Out

Many lenders have already dropped out of the buy-to-let mortgage market. Is the resultant strain on other area lenders going to be difficult enough to push them out as well? After all, suddenly scores of buy-to-let investors need to look for new lenders to obtain their buy-to-let mortgages from. How are they all going to possibly find enough lenders to fulfill their needs?

Obviously, potential buy-to-let investors have simply moved on to new lenders with their requests for mortgages. Unfortunately, the pressure of trying to meet so many new mortgage requests strictly for the buy-to-let investment area is taking its toll on lenders. In fact, many lenders have recently decided to decrease the number of buy-to-let mortgages that they are offering or to cease offering any at all.

Plus, requirements for obtaining a buy-to-let mortgage continue to remain stringent as most lenders are holding fast to new policies regarding this type of mortgage. Specifically, the size of the deposits that are required for buy-to-let investments has increased in order to decrease the maximum loan to value amount. Plus, the days of 100% and 90% maximum loan to value mortgages are gone, perhaps forever. Moreover, rather than abiding by the 85% loan to value, many lenders are now looking for a maximum loan to value of 75%, making it more difficult for smaller investors to get a foot in the door, but narrowing the numbers at the same time.

In fact, most lenders are not solely in the business of providing buy-to-let mortgages. Therefore, in an effort to retain a well-proportioned business of lending, they must necessarily refrain from becoming too entrenched in offering buy-to-let mortgages.