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Nearly one in 10 landlords has purchased buy-to-let property in 2009 – proving that there is still life in the industry and there are still opportunities to get hold of buy to let mortgage finance.

According to the latest survey by Paragon Mortgages, the buy to let sector is on the up – as well as more people investing in property, the amount being made by landlords has also increased over the last three months – the average yield across landlords’ portfolios rose from 6.2% in the first three months of 2009 to 6.4% in the second quarter of the year.

This is leading landlords to become a little more bullish about their future. The survey found that 30% of landlords predict that tenant demand will rise over the next 12 months. This is no surprise as more people struggle to afford to get onto the housing ladder.

However, it's not just first-time buyers who are unable to get hold of the mortgages that they need – 43% of landlords state that a lack of mortgage finance is the main obstacle to expanding their property portfolio.

John Heron, managing director of Paragon Mortgages says: "Landlords are telling us that they want to buy new property because they recognise that yields are increasing, but the lack of available finance in the buy to let mortgage market is making it difficult. Until more is done to increase lenders’ access to funding, we could see the private rented sector enter into a period of stagnation because landlords are struggling to buy."

It is hard to find mortgage credit right now, but your best hope is to talk to a mortgage broker. A broker still has the tools and the knowledge to search the whole of the market and find a deal that can work. The market is smaller and the lenders are demanding much more from borrowers but if anyone can get you a buy to let mortgage, it's a mortgage broker.

SOURCE: Paragon, 27/07/09

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