According to Paragon’s latest PRS Trends report, landlords are continuing to reduce borrowing as levels of gearing reached an all-time low in Q4 2017.

Average LTV of investment property portfolios was 35% in Q4 2017, the joint-lowest level recorded in over 15 years, as recent fiscal and regulatory changes targeting landlords have dampened landlord motivation to take higher LTV buy-to-let mortgages.

Meanwhile, asked at what point they would need to sell properties in the event of rising mortgage interest rates, landlords appeared confident of coping with increased outgoings, with more than half (51%) of landlords saying any decision to sell properties is not dependent on mortgage interest rate.

Of the remaining 49%, the average mortgage interest rate at which landlords said they would consider selling properties is 5%.

More than four out of ten respondents (43%) said that any decision to increase rent was not dependent on mortgage interest rates, and slightly more than half (51%) said that any decision to refinance properties was not dependent on mortgage interest rates.

John Heron, Managing Director – Mortgages at Paragon said: “Contrary to the view held by some, there is strong evidence that gearing levels across portfolios are very low in the buy-to-let sector, with a peak of 43% LTV across all types of landlords in the last 15 years. Since that peak in 2012, gearing has been on a downward trend and currently sits at an all-time low of 35%.

In response to fiscal changes over the last two years, landlords are clearly less willing to take higher loan-to-value mortgages and borrow more, whilst regulatory changes, though welcomed by lenders, have constrained the market in its ability to offer higher LTV mortgages.

There is no evidence to suggest lending to landlords has been anything other than sustainable. With low levels of gearing landlords appear well positioned to withstand the higher interest rates that the markets are anticipating, which is good news for buy-to-let and the wider private rented sector.” Thanks to for the original article

If you are a landlord in Rugby, Lutterworth or the Coventry area then maybe you are due a “health-check” of your mortgages and loan arrangements? We can arrange a free, no obligation “health-check” to make sure that you are on the very best rates and can even look at consolidating portfolio finance to reduce your outgoings. Your money’s better in your pocket than the banks’ – so pick up the phone or email/facebook/twitter message us and we can arrange a casual chat, at your total convenience, in your home, our offices, your office, the pub, cafe… …You get the idea!