Many first time landlords do not have the credit records that accord with lenders’ algorithms, denying them finance unreasonably.

That’s the view of Maeve Ward, director of commercial operations at Mercantile Trust.

She says a survey by her company shows that a substantial number of brokers are regularly facing challenges when placing buy to let applicants, especially first timers with adverse credit.

Mercantile’s recent webinar poll of over 100 brokers — conducted during alongside Knowledge Bank — shows 55 per cent of respondents regularly having problems arranging deals for first-time landlords, with around half citing adverse credit histories for applicants. 

Some 30 per cent of brokers cite affordability issues and/or rental calculations not being high enough to meet lenders’ criteria; either brokers reported issues with lenders agreeing to deals to fund energy efficiency upgrades on buy to let units.

Maeve Ward says: “These findings show there is a real need for more specialised buy to let lenders out there in the marketplace to help brokers find real solutions for their clients.

“There are many landlord applicants who are underserved by the market due to adverse credit issues, rental shortfalls and background income security types that have capital raising needs, but don’t quite fit the automated models of the high-street lenders.

“They need lenders to take a more common-sense approach, which is achieved through a more human underwriting process that the likes of Mercantile Trust can offer.”