Specialist lenders filling liquidity gap for property investors

Around 44% of the 82 property investors questioned cited affordability as the main barrier to getting mainstream funding, followed by adverse credit at 34% and strict lending criteria at 22%.

However, 47% of investors got a secured loan as an alternative, while 39% opted for a bridging loan.

Three quarters of investors intend to expand their portfolio in 2017, with 67% targeting London and 33% looking to buy in the South East, despite changes to tax relief for residential landlords.

A majority of respondents said scrapping an additional 3% stamp duty hike on buy-to-let and second homes would greatly help, when asked how the UK government could improve the private rented sector.

Tomer Aboody, director of mtf, commented: “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.

“It’s certainly been a tough 18 months for landlords but alternative lenders are stepping in to meet the needs of borrowers.”