Buy-to-let lenders soften-up on deposits

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by Gill Montia

Buy-to-let borrowing limits have begun to thaw, according to letting agent, LetAssured.

With many lenders demanding deposits of over 30%, London & Country is breaking the ice by offering a three-year fixed rate of 6.49%, with a fee of £995 on a maximum loan-to-value (LTV) ratio of 80%.

Nottingham Building Society has also improved the LTVs on its buy-to-let loans, for both re-mortgagers and purchasers.

For example, borrowers now need a 30% deposit to take advantage of a three-year fixed-rate deal at 5.59% (down from 5.89%).

Looking to the future, LetAssured managing director, David Plaister, comments: “With workable interest rates and sensible deposits … landlords can once again start to consider property as a serious investment vehicle.”

He adds: “Low property prices linked to sensible mortgage options is a positive mix for any property minded investor”.

However, Mr Plaister advises both new and existing landlords to choose their letting agent carefully, explaining: “Hidden fees or extortionate maintenance charges can often be the difference between making property investments work, or not!”

Landlords can also look forward to longer-term tenancies, according to new research from lettingsearch.co.uk.

The property portal says periods of tenure are extending, suggesting that the UK’s private rental sector could be moving towards the European model.