Landlord LTVs keep falling say Paragon

Loan-to-values on BTL mortgages are falling according to  Paragon Mortgages’ PRS Trends Report .

In Q1 2016 the average LTV on a BTL mortgage fell 2%, to 35%. 

The average LTV on a BTL back in Q2 2012 was 42%.

Paragon Mortgages, MD John Heron comments: 

“Average gearing is low and getting lower, and this long-term de-leveraging demonstrates just how financially conservative buy-to-let landlords are.

Looking ahead, it’s realistic to expect this downward drift in gearing to continue as the PRA’s new buy-to-let underwriting standards take effect.

Our PRS Trends Report indicates a resilient sector in Q1 2017 but, as the mortgage interest rate tax changes filter through between now and 2021, landlord confidence may be eroded further which could well result in a reduction in the supply of property to the sector and, in turn, higher rents.”

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