Buy-to-let landlords are now making mortgage applications with £99,914 of equity behind them, a new report has revealed.
The amount they are putting down as deposits has jumped by 15 per cent to almost £100,000 – a rise of £13,289 in the last year.
According to the Mortgage Search Tracker from the Mortgage Advice Bureau, which analysed 250,000 monthly product searches in the last three months of 2014, the higher cash deposits have helped landlords access better interest rates.
With more landlords having a greater amount of equity behind them, the average loan to value deal sought by borrowers dropped from 62.2 per cent to 56.5 per cent, The Daily Telegraph reports.
The Mortgage Advice Bureau believes this has increased their chances of securing lower interest rates as they represented a more secure prospect to lenders.
“Landlords are in an especially strong position to use their recent equity gains to negotiate a better mortgage deal. House prices have settled into a steadier pattern in recent months, but the current low rate environment offers many buy-to-let borrowers the chance to reassess their finances,” said Brian Murphy, head of lending at Mortgage Advice Bureau.
Buy-to-let customers are also looking to borrow over a shorter period of time.
Twelve months ago, 62 per cent of buy-to-let borrowers were looking for a mortgage term of 25 years or more. This fell to 52 per cent in the fourth quarter of 2014.
Meanwhile, the proportion of borrowers looking for a loan of 15 to 24 years rose from 29 per cent in the fourth quarter of 2013 to 41 per cent in the last three months of 2014.
The average asking price for a property across England and Wales was £279,004 in February, according to figures from Rightmove.
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