UK Money News
27th February 2008
Landlords face bigger deposits
Landlords are having to pay larger deposits because lenders are cutting their loan-to-value (LTV) ratios.
That is the finding of research by the personal finance website Moneyfacts.co.uk, which said investor buyers were now having to spend more to add to their portfolios.
"Moneyfacts.co.uk calculates that, this time last year, the average buy-to-let LTV across all prime products was 82.8 per cent. Today it is 80.1 per cent," said Alan Harper, the website's senior analyst.
"Based on taking an average LTV on an 'average' house price in February 2007 of £189,197, a borrower would have required a contribution of £32,542.
"On today's figures, they would need to find £38,063," he added.
The figures show that while all the attention has been on personal mortgages, which have seen lending conditions tightened, investors are also feeling the squeeze.
Despite this, demand among buy-to-let investors remained strong in the second half of last year with the number of approved loans up on the first six months.
The figures from the Council of Mortgage Lenders (CML) suggested even though the credit crunch continued to ripple through the economy, landlords remain bullish
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