Landlord 'take interest rates in their stride'

Landlords are borrowing less money to purchase buy-to-let properties, insulating them against interest rate rises, new figures suggest.

Research from Paragon Mortgages shows that on average, landlords' loan-to-value across a property portfolio is now 37 per cent, a two per cent drop from last quarter.

The industry's standard maximum loan-to-value is 85 per cent, but both professional and small landlords are gearing their overall portfolios at less than half the maximum allowed by the criteria, the report concluded.

It claimed that both buy-to-let landlords and financial advisers were aware of the need not to expose themselves to risk unduly and that landlords were now better placed financially than they had been for 15 months.

Managing director of the firm John Heron 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 added.

Around 40 per cent of 20-somethings who are planning to buy property in 2007 will do so as an investment, as will a quarter of single parents, according to a study from Birmingham Midshires.

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