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Investment mortgages have recently been in short supply, due to pressure on lenders from the effects of the ongoing credit crunch. Banks are now in a phase of recapitalising (rebuilding their reserves) before easing investment mortgages back onto the market in a controlled way.

As a result, it has been difficult for property investors to find investment mortgage products to fuel the growth of their portfolios in recent months, and many have been forced to find alternative methods to continue at a sensible pace.

Commercial investment mortgages have also been in short supply, with lenders choosing to focus on narrow lending criteria, and in industries that are more recession proof (including health care provision, professional services like Solicitors Practices and some specialist high street retailing).

At our local property investment club, members have been in deep debate about how to continue with acquisitions when investment mortgages have been in such short supply. Many have changed their strategy to incorporate property options (rent to own), and other packaging devices to maintain a flow of income. Some now even specialise in sourcing below market value property leads to sell on to cash buyers – who are obviously not impacted by the lack of investment mortgages.

With some green shoots in property pricing data over the last few months, many commentators are predicting that the worst of the property slump may be over. However, I believe that until there is a better range of investment mortgages available there ‘s still a risk of further declines in UK property prices as investors will not be able to find sufficient funding to drive up demand.

If you’re interested in my own source of competitive investment mortgages, I recommend speaking to the guys at M&S Mortgage Solutions in Bournemouth who look after my borrowing needs.

As ever, feel free to leave a comment…

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