Landlords take out larger loans to capitalise on falling prices
News Category: Industry News
Published: 22-Sep-2008
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Property investors and professional landlords are taking out mortgages with higher loan to value rates as they rush to take advantage of falling prices in the home buying sector, a study suggests.
Figures from Legal & General (L&G) show that during the second quarter the average LTV on mortgages taken out by buy to let borrowers stood at 67 per cent.
However, in the last three months of the year this has risen to 73 per cent.
Stephen Smith, director of housing at L&G, said the trend can be attributed to the fact that "cash-rich landlords are taking advantage of the increasing demand for rental accommodation".
The study also discovered that fixed rate mortgages are growing in popularity among property investors with 55 per cent opting for this type of loan compared with 43 per cent who chose a variable rate deal.
News of the findings come as separate research from online property portal Rightmove revealed that the price of a UK home is now 3.3 per cent less than it was at this time last year.
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