Lender quality is vital factor in landlords’ buy-to-let borrowing approach.By Mark Long
Recent findings from BVA BDRC’s Landlords Panel revealed that 70% of landlords operating in the private rental sector borrowed to fund their property portfolio.
The vast majority of these (between 70% and 90%) arranged their buy-to-let loans through an intermediary specialising in such products and able to give advice on complex lending criteria.
In BVA BDRC’s Q1 2014 Landlords Panel survey, more than 1,000 landlords were asked what sources of information they turned to when considering a BTL lender or loan.
We discovered that while smaller landlords (1-4 properties) were much more likely to use comparison websites and advice from a friend or relative, mid-to-large sized landlords (5-19 and 20+ properties) would turn to lenders with whom they have worked before, or to financial press coverage, trade press and trade body coverage, and, frankly, the limited number of lenders they can in fact borrow from.
Smaller landlords also put more focus on the advice brokers gave and the 'price' of the BTL product in rate and fee terms, while larger landlords were much more focused on lending criteria and previous experiences with a lender.
BVA BDRC’s Landlords Panel exposed a clear link between number of properties in a landlord’s portfolio and their approach to borrowing for the BTL market.