BTL Affordability spread more than double the residential market

The spread between the average maximum and minimum loan available to buy-to-let mortgage applicants is more than double the spread in the residential market.

This is according to data from Mortgage Broker Tools, which found that the average maximum loan available to residential customers in February was £235,475, whereas the average minimum loan was £136,000 – representing a spread of £99,475.

For buy-to-let customers, the average maximum loan was £346,153, while the average minimum loan was £131,687. This equates to an affordability spread of £214,466, which is more than double that in the Residential market.

Analysis of cases processed through the award-winning MBT Affordability platform has found that, while the residential market is subject to frequent changes in the affordability landscape, BTLAffordability has remained relatively stable. However, the large spread between the average maximum and minimum available loans put greater emphasis on choosing the right lender to match a client’s loan requirements.

Full details from the Index are included in the attached documents and more information is available at www.mortgagebrokertools.co.uk

Tanya Toumadj, CEO at Mortgage Broker Tools, said:  “This data from MBT Affordability shows that the choice of lender for a buy-to-let client can make a huge difference to the size of loan they are able to access.

“Many investors are keen to maximise their leverage to make greater use of their capital, so it’s important that brokers are able to easily identify those lenders that can provide larger loan sizes for buy-to-let clients. Choosing the wrong lender could limit a landlord’s options and have a significant impact on the success of their investment strategy.

“So, carrying out thorough affordability research is just as important in the buy-to-let market as it is for residential clients – if not more so. The affordability landscape may be more stable in this part of the market, with fewer tweaks and changes to calculations, but the consequences of not choosing the right lender are more significant.

“This is why a technology platform like BTL Affordability is so important to any broker who works with landlord clients. BTL Affordability provides brokers with more complete coverage of the market with one, easy to use, calculator that gives accurate eligibility calculations based on the affordability calculators and criteria of 65 buy-to-let lenders.

“Brokers can carry out research for landlords buying as a limited company or in their own name and the results presented by BTL Affordability show how much an investor can borrow based on both the ICR of the property and whether they want to include top slicing from their personal income.”