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Landlords face new mortgage rates
2009-01-14
Buy to let mortgage holders might find they have to provide an increased deposit in order to expand their portfolios in the current economic climate.
According to research by Moneyfacts.co.uk, the final buy to let deal which offered less than a 20 per cent deposit is no longer available on the market.
The impact of the economic downturn has affected landlords, as some mortgage lenders have struggled to pass on interest rate cuts to their borrowers in the current climate.
Moneyfacts.co.uk noted that ten per cent and 15 per cent deals used to make up 61.1 per cent of the buy to let mortgage market but are now no longer available.
Michelle Slade, analyst at the firm, commented that many landlords are moving on to standard variable rates (SVRs) at the end of their deals.
"For some this may be no great hardship, but some lenders have not passed on cuts to their BTL (buy to let) SVRs as they have to their residential version," she said.
For cash-ready buy to let mortgage holders, the economic downturn could provide significant investment opportunities, as struggling landlords exit the market and UK house prices continue to fall.
Nine out of ten landlords are neither buying nor selling properties, according to research by the Association of Residential Letting Agents published last month.
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