Rate hike unlikely to hit investors
(20 April 2007)

Landlords with buy-to-let mortgages are in a good position to deal with further interest rate rises, a study has shown.

Research by Paragon Mortgages has found that the majority of these investors currently have borrowings of less than half of their investment portfolio, with the average loan-to-value standing at 37 per cent.

This figure marks a drop of two per cent on last quarter's findings and is far less than the standard maximum loan-to-value of 85 per cent.

John Heron, managing director of Paragon Mortgages, said: "Some have suggested that the succession of interest rate rises since last summer will leave property investors in financial difficulty. This is not the case.

"Landlords are well placed to take the further expected rate rise in their stride," he stated.

Mr Heron added that more than 70 per cent of buy-to-let mortgages taken out recently had been fixed-rate products, highlighting the awareness of landlords and investors to not expose themselves to risks unduly.

In February, the number of properties in an investor's portfolio rose to 11.1 from 10.2 in November 2006, the financial product provider recently stated.