Most landlords 'not overstretched'

The vast majority of buy-to-let landlords have not over-borrowed and should be able to ride the global credit crunch without sustaining crippling losses.

That's according to Malcolm Harrison, a property expert from the Association of Residential Letting Agents (ARLA), who told the Times that the average mortgage taken out by landlords is for less than 75 per cent of a property's value.

Although falling house prices have limited the amount by which capital gains can supplement rental income, he said that most landlords are long-term investors who have invested in property during their forties as an investment for retirement.

"A high proportion are not too worried about making a net annual profit," he explained. "They tend to have a reasonable amount of equity in their properties and many have a day job. They are not panicked by short-term ups and downs because they reckon that they can still make a profit in the long term."

It was recently claimed that most home movers prefer to rent rather than buy property because of the turbulent state of the current economic climate.

Peter Beckett, of Iammoving.com, said that mortgages remained unaffordable for many, despite interest rate cuts.

Published 16th April, 2008

© 2008 Estates IT Limited