Few things are more frustrating for landlords than having a mortgage application declined. You may have spent weeks preparing documents, only to be told your case doesn’t meet criteria. In 2025, with lenders applying strict affordability and compliance rules, declines are more common than many landlords expect. The good news is that a decline is not the end of the road. Understanding why it happened and how to respond can turn a setback into a successful application elsewhere.
Why Buy-To-Let Applications Get Declined
Lenders may reject applications for a range of reasons. The most common include:
- Affordability failure – rental income does not meet the stress test at 125% or 145% coverage.
- Excessive LTV – loan requested exceeds the lender’s maximum, often 75% in 2025.
- Credit issues – late payments, CCJs or too much personal debt.
- Portfolio imbalance – one or more weak properties drag down the overall profile.
- Property type – flats above shops, HMOs or holiday lets rejected by mainstream lenders.
- Documentation gaps – missing tenancy agreements, incorrect SIC codes, or inconsistent bank statements.
The Impact of a Decline
While a decline is frustrating, one refusal does not damage your credit file. The lender may leave a “hard search” mark, but this alone is not usually enough to affect future borrowing. The main risk is wasting time and missing out on competitive products while reapplying.
Case Study: From Decline to Approval
Scenario: A landlord applied for a remortgage on a two-bed flat in a city centre. Rent was £950 per month, but the lender applied a 145% stress test at 7%, requiring £1,268. The application failed affordability.
Solution: The broker redirected the application to a lender applying 125% coverage at the pay rate of 5.25%. Required rent dropped to £1,042, meaning the £950 rent was still marginal. By adding the landlord’s surplus rental income from another unit in the portfolio, the case passed.
Outcome: The landlord secured a five-year fixed deal, cut reversionary interest costs, and avoided being stuck on an uncompetitive rate.
Steps to Take After a Decline
- Request the reason in writing – lenders must explain why the application failed.
- Check for errors – valuation discrepancies, missing paperwork or incorrect figures can sometimes be corrected.
- Consider alternative lenders – criteria vary widely, especially for SPVs, HMOs and holiday lets.
- Restructure the loan – reduce the loan size, increase rent, or provide additional evidence.
- Use portfolio surplus – strong properties can offset weaker ones if assessed in aggregate.
How to Prevent Declines in the First Place
- Run affordability tests at both 125% and 145% coverage before applying.
- Prepare a complete portfolio spreadsheet with up-to-date balances and rents.
- Ensure SIC codes, company accounts and tenancy agreements are lender-compliant.
- Engage a specialist broker who can pre-screen cases against multiple lenders’ rules.
Final Thoughts
Mortgage declines are a reality of the current market, but they are rarely the end of the story. With persistence, better preparation and the right lender match, most landlords can still refinance successfully. The key is to understand lender criteria in advance and avoid wasting applications on unsuitable products.
Speak to Our Sponsor
Our sponsor works daily with landlords whose applications have been declined elsewhere. They know which lenders are flexible on stress tests, property types and portfolio assessments, and can help you turn a “no” into a “yes”.
Contact Our Buy-to-Let Mortgage Broker Sponsor
Publication date: Monday, 24 November 2025