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Buy-to-let landlords play safe

Wednesday, 4 May 2005 12:00 AM

Buy-to-let landlords are ignoring new mortgages offering higher loan-to-value (LTV) rates, in favour of playing safe.

According to Mortgage Trust's forecast for April, almost two landlords in three found no use for the higher LTVs - preferring to borrow no more than 85 per cent of the value of the property.

Nicola Severn, marketing manager at Mortgage Trust said: "Buy-to-let landlords operating in today's market are cautious investors who believe in responsible borrowing. They have little desire to mortgage themselves above modest levels, and at 77 per cent, Mortgage Trust's average completion loan to value thoroughly supports this."

Many are increasingly re-mortgaging to secure existing loans in case of possible rises in interest rates, with intermediaries predicting that remortgaging will be a larger part of their business over the next three months.

Ms Severn added: "For the first time we have seen the proportion of business expected from remortgaging exceed that expected from loans to experienced investors adding to portfolios.

She said the trend went hand in hand with releasing equity for further investment and demonstrated how landlords managed their finances actively to maximize the return on their investments over the long term.

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