Average buy-to-let loans and deposits increased last year, as a result of increasing property prices and the tougher stance by mortgage lenders on criteria and rental calculations, new figures show.
Fresh research from The Mortgage Broker Ltd, a nationwide broker providing mortgages to buy-to-let landlords and investors, reveals that landlords borrowed an average of £15,000 more to purchase property in 2016, compared with the previous year, with the average loan increasing in 2016 to £185,188, from £170,268 in 2015.
The average loan to value dropped from 61.6% in 2015 to 59.7% in 2016 and the average deposit rose by 18.5% from £105,605 in 2015 to £125,016 in 2016.
What’s more, buy-to-let landlords and investors paid an average of 12.7% more for their properties year-on-year, with the average property price sitting at £310,265 in 2016, compared with £275,286 in 2016.
Darren Pescod, managing director of The Mortgage Broker Ltd, said: “Landlords are certainly feeling the pinch, but the raft of tax changes that came into force in 2016, do not appear to have dampened the buy-to-let market.
“In many towns and cities, landlords have increased their investment in buy-to-let property, despite the financial challenges that have been recently thrown at them by the government.
“Our research shows that landlords are finding larger deposits and increasing their borrowing to secure property. With mortgage interest rates so low and the demand for rental property booming, the market still provides a great investment opportunity.”