Landlords have had to endure less attractive mortgage terms compared to owner occupiers paying a higher rate of interest as well as being able to borrow less as a proportion of the value of the property. All this because in the eyes of lenders, landlords were at a greater risk of defaulting because an owner occupier was considered to be more likely to maintain their mortgage payments in tough times. To me this flies in the face of the commercial logic that a landlord receives rent for their property and therefore for the most part should cover their outgoings including their mortgage costs.
In my view makes them less vunerable to financial hardship and more able to maintain their payments than most owner occupiers. Am I misreading this - your views appreciated....
Buy-to-let mortgages - search for the best rate
Never thought the rate reflected perceived or real higher risk - Banks simply have the ability to hike the price and get higher returns from BTL. A higher yield from a lower risk market sector - the Banks can't lose.
ReplyDeleteThere must be stats to support the true position of which market sector is higher risk? Would make the argument for reform stronger if stats supported BTL as lower risk.