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First-time landlords now find it harder to get a buy-to-let mortgage, suggests new Moneyfacts research

2-minute read

Mollie Millman

12 April 2017

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If you’re a first-time landlord, you may find it more difficult than before to get your venture off the ground, new research suggests.

This is because the finance available to those undertaking a property investment for the first time is being restricted.

A report from financial group found that the number of mortgage products available to first-time landlords has dropped from more than 1,000 in the past two years.

In contrast, the overall number of buy-to-let products has increased during the 24 months from April 2015 to April 2017.

Are new landlords missing out?

Charlotte Nelson, a finance expert at, said: “Over the past few years the number of buy-to-let products on the market has increased, but despite this new landlords have missed out on the buy-to-let boom.”

She added that this could be explained in part by the uncertainty that exists in the market at the moment, which has made some providers slightly more risk-averse.

“By their very nature, first-time landlords lack experience in managing rental properties,” she said, “and this is considered more of a risk now than perhaps it once was.”

Tighter lending criteria for first-time landlords

Concerns about the buy-to-let market overheating have led to several new rules being applied to the market, from additional taxes to tighter lending criteria for landlords.

Ms Nelson noted that tougher affordability rules which have reduced the amount landlords can potentially borrow are being felt in the market. The average two-year fixed rate at 70 per cent loan-to-value has risen by 0.14 per cent to 3.16 per cent since January.

“This could be disproportionately affecting first-time landlords, who may want to borrow at higher loan-to-values.” she said, as the extra regulation means borrowers will face added checks and questions about their finances.

As for advice, Ms Nelson concluded that “Any would-be landlords will need to do their homework and prepare in advance to ensure they can pass with flying colours and get the buy-to-let mortgage they want.”

Have you noticed changes in the offering for landlords over the last two years? Let us know in the comments.

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