However, mortgage finance looks set to remain a serious issue for residential property investors in 2010, with mortgage conditions worsening in the final quarter of 2009.
Landlords reported that it was more difficult to secure mortgage finance during the fourth quarter than in the previous three months.
Of those that applied for a mortgage for portfolio expansion or remortgaging purposes, an overwhelming 67% said that it was more difficult to secure a mortgage in Q4 2009 than Q3.
A quarter (26%) said that there was no difference, with 7% stating that they found it easier to secure mortgage finance between the two quarters.
John Heron, Paragon Mortgages’s managing director, 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 mortgage market, which is dominated by just two lenders. Landlords have told us that it 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.
"Most buy-to-let lenders currently active in the market employ aggregate or maximum lending levels, placing a ceiling on the number of properties they will lend against, which makes it difficult for professional landlords to expand portfolios because they are usually already at those lending levels. It is ironic that the criteria employed by most lenders favours
inexperienced landlords over those with proven track records in residential property investment and management."
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