Landlords building up a 'cashpile'?

If the latest stats from the FT are to be believed it could well be that landlords are using their relatively low gearing to remortgage to build up a cashpile, ready to take advantage of further projected weakness in the UKs housing market.

Traditionally many experienced landlords have run at fairly low levels of gearing with the average in the sector even during the boom years running at only 40%.  Now according to Paragon Mortgages Financial Adviser Confidence Tracking report landlords accounted for almost 1 in 5 of mortgage intermediary business.

The majority of this comprises of experienced landlords (48%) buying additional properties to expand their portfolios.  However, a third of all buy-to-let mortgages is for remortgages.  Could this be landlords looking to build up a cash pile ready to jump in and buy up bargains in light of the storm clouds appearing in the prospects for the UK housing market?  We have advised landlords in the past of the advantages of building up a cash pile in allowing them to 'gobble up' a property bargain.

If so landlords will have the added reassurance that their investments are underpinned by record rents and demand for rental property.

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