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Landlord deposits have risen by 15 per cent in the last 12 months. Landlords are now putting down an average of £100,000 as a deposit, which is a jump of more than £13,000. Because landlords are able to hand over larger deposits when they invest in new properties, they are able to access better interest rates on buy to let mortgages, in part because lenders see them as a more secure prospect.
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Landlords Use Equity Gains
“Landlords are in an especially strong position to use their recent equity gains to negotiate a better mortgage deal. House prices have settled into a steadier pattern in recent months, but the current low rate environment offers many buy-to-let borrowers the chance to reassess their finances,” said Brian Murphy from the Mortgage Advice Bureau.
Data also shows that the average property value among buy to let landlords is just under £230,000. This is similar to the average property price paid by homeowners.
Longer Mortgage Terms Out
Thanks to higher amounts of equity, many landlords are no longer seeking out long mortgage terms of 25 years or more. A year ago, 62 per cent of buy to let borrowers applied for 25-year mortgages. In the space of a year, this figure has fallen to 52 per cent. However, during the same time frame, the number of buy to let borrowers looking for mortgage terms of 15 to 24 years rose from 29 per cent to 41 per cent.
