As part of the Committee’s new inquiry into mortgage arrears and access to mortgage finance, the NLA will give evidence suggesting that landlords have had significant difficulties in buying and selling property as well as refinancing existing portfolios. Where limited mortgage finance is available, landlords have to offer far higher deposits with average loan-to-value (LTV) around 70 to 75%.
The NLA will also give evidence which shows that, along with the wider mortgage market, lending criteria have become stricter. With the increase in arrangement fees and the reduction of interest only mortgages, the consequence is that those considering entering the market for the first time are finding it almost impossible to find appropriate mortgages and are unlikely to become landlords using the conventional channels.
David Salusbury, chairman, National Landlords Association, said: “We are in no doubt that the lack of availability of mortgage finance is having severe consequences for landlords across the UK. With over 25% of landlords saying they would like to seek finance during the next quarter, this dearth of buy-to-let products is strangling the market.
“Together with colleagues from across the property industry, we very much hope to be able to show the Treasury Select Committee clear evidence that the increase in mortgage arrears and repossessions comes as a direct consequence of a rise in rental arrears.”
