Buy-to-let is 'rock solid' at 80% LTV

by Daniel Jones

Before thinking about drawing up a tenancy agreement, the first step for any would-be landlord is to secure a mortgage. The good news for people looking to invest in the private rented sector (PRS) is that mortgage providers are now offering better deals, with the buy-to-let market "rock solid" at 80 per cent loan-to-value (LTV), according to Mortgages for Business.

Six mortgage lenders offer more than 20 buy-to-let mortgages with LTVs up to 80 per cent, according to data from Mortgage Flow, the firm's bespoke mortgage sourcing tool.

From December 2008 to May 2010 the highest achievable LTV for a buy-to-let mortgage was just 75 per cent. The six lenders that offer 80 per cent LTV or above now are Kent Reliance Banking Services, Saffron Building Society, Leeds Building Society, Aldermore Mortgages and now Clydesdale Bank.

David Whittaker, managing director at Mortgages for Business, commented: "This is great news for landlords and investors and demonstrates the growing confidence of lenders in this sector who see buy to let as more profitable than homeowner lending.

"Between them, there is a good range of products on offer from two year discounted trackers to five year fixed rates. Some even come with flat arrangement fees which really start to make sense for investors looking to borrow larger sums."

But, while there are some good deals out there, it is vital for landlords not to enter the PRS without knowing what's in store. Would-be landlords need to sort out various bits of paperwork, from a tenancy agreement to a fire risk assessment.

David Lawrenson, PRS expert at, says: "It is not easy and there is a lot to know." Problems can range from a bad tenant who needs a section 21 notice to those who simply refuse to pay rent. "You have to maintain the property properly and have gas safety checks done. It is not that hard, but they need to be aware of what their responsibilities are," he explains.

Published on: January 27, 2012

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