Although we are starting to see some signs of improvement in the mortgage and home owner loan industry at the moment, it would appear that this optimism is not shared by professional landlords who are looking for new loans to purchase more buy to let properties to develop their portfolios.

According to new research from the buy to let loan specialist, Paragon Mortgages, the situation with regard to funding for buy to let loans has actually got worse during the final three months of last year, rather than seeing signs of improvement and Paragon believe that obtaining a new loan will remain difficult for landlords throughout the course of this year.

Paragon conducted a survey amongst professional landlords and found that only around 10 per cent of these were planning to purchase property with a buy to let loan in the first three months of the year, due to the lack of available funding, despite the fact that there are plenty of realistically priced properties available on the market at the moment. The survey also found that around 67 per cent of professional landlords said that they found it more difficult to obtain a buy to let loan in the last three months of last year, than they had in previous months, as many lenders restrict the number of properties and therefore loans which a single investor is able to have.

John Heron of Paragon said “It is encouraging that landlords are still active in the market and are looking to expand their portfolios. With tenant demand at such strong levels and soft house prices presenting the opportunity for bargains, it is easy to see why. But investors continue to be frustrated by a lack of choice and competition in the buy to let loan market, which is dominated by just two lenders. Landlords have told us that is was more difficult to source mortgage finance in the fourth quarter than in the third and we see nothing to suggest that the situation will improve quickly.”