Buy-to-Let borrowers are putting more money down when they take out buy-to-let mortgages in what Mortgage Advice Bureau say is a bid to shorten mortgage terms, that’s according to a new report published by cityam.com Monday.
Purchasing landlords have been increasing the amount of money (equity) behind their mortgages by around 15 per cent over the past year to an average of almost £100,000, while the average value of properties being added to private landlords’ buy-to-let portfolios has remained relatively static at just under £230,000.
These new figures produced by the Mortgage Advice Bureau show loan to value rations have been dropping as house prices have risen over the last year, with the average deal sourced by buy-to-let borrower landlords dropping from 62.2 per cent to 56.5 per cent.
This trend is allowing landlords to benefit from lower costs ongoing running costs as they represent a more secure investment return prospect.
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), told Cityam:
“A number of mainstream lenders have increased their buy-to-let offer already and new entrants have also arrived to boost competition,
“It means this part of the market is likely to see strong activity this year, both from people who are already involved with BTL and others who are learning the ropes.”
The MAB research also showed that buy-to-let borrowers are looking for shorter mortgage terms, with those seeking mortgages of 25 years or more declining by 10 percentage points to 52 per cent over the past year.
Landlords Putting more Money Down for Buy-to-Let Mortgages in Bid to bid to Shorten Mortgage Terms – http://t.co/eJkNGFUwmy
— LandlordZONE (@LandlordZONE) March 5, 2015