Landlords are keen to expand their buy-to-let property portfolios but many are still facing problems raising the mortgage finance they need, research showed today.
Around 28% of landlords plan to buy more properties to rent out during the coming year, rising to 40% among investors who already own five or more properties, according to LSL Property Services.
Just under half of landlords think now is a good time to invest in property, mainly due to rising tenant demand.
But nearly two-thirds of investors thought it was now harder to get a mortgage than it had been three years ago, with 28% saying it was much more difficult.
Only 11% of smaller landlords had successfully obtained a mortgage during the past year, rising to 23% among larger investors, who typically have more equity in their portfolios.
Figures from the Council of Mortgage Lenders show that only 93,500 buy-to-let mortgages were advanced during 2009, a quarter of the number seen in 2007.
David Brown, commercial director of LSL Property Services, said: "Undeniably, the difficulty in obtaining mortgage finance is holding back investment in the private rental sector.
"Over 90% of buy-to-let products have vanished from the market as lenders continue to keep their purse-strings drawn tight."
But despite the problems in the mortgage market, only 13% of landlords expect to reduce their property portfolios during the coming 12 months, including those who are selling up because they are retiring and people who are leaving the market for lifestyle reasons.
Only 3% of landlords said they needed to reduce their borrowings because they were in negative equity, with 63% saying they were comfortable with their current level of debt.
Among those landlords who thought rental property was a good investment, 94% said attractive house prices were the key factor, with 46% citing improved tenant demand and 41% saying property offered better returns than other investments.
Nearly two-thirds of landlords expected tenant demand to continue increasing during the coming 12 months.
* LSL questioned 340 landlords during March and April.Reuse content