The average buy to let loan and deposit grew during 2016, fuelled by rising property prices and increasingly stringent criteria from lenders.
New research from the Mortgage Broker found that on average, landlords borrowed £15,000 more to purchase property during 2016. The average loan reached £185,188, up from £170,268 the previous year.
The average loan to value fell from 61.6 per cent in 2015 to 59.7 per cent in 2016, whilst the average deposit rose 18.5 per cent. It had previously stood at £105,605 before rising to£125,016 in 2016.
Property prices saw a solid growth in price, with landlords and investors paying 12.7 per cent more for their properties annually. The average property price was found to be £310,265 in 2016, up from £275,286 in 2016.
Managing director of The Mortgage Broker, Darren Pescod, 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.’