Paragon said that landlords in the UK borrow approximately 40 per cent of the total value of their properties, which the firm concludes will give “ample room to accommodate any expected rise in borrowing costs”.
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Managing director at Paragon John Heron said: “Over the last four years landlords’ loan to portfolio value ratios have been generally declining, showing that on the whole, buy-to-let now has a lower risk profile than it did in 2003.”
“Despite some scaremongers predicting the decline of buy-to-let post rate rise, the vast majority have left themselves ample room to accommodate any expected rise in borrowing costs.”
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A recent survey conducted by BDRC for Alliance & Leicester Mortgages, revealed that the buy-to-let market is high with over a quarter of landlords saying they will remain in the market indefinitely.
Rising interest rates will “not deter them” with 38 per cent deciding to increase rents and 32 per cent simply doing nothing.
Two per cent are likely to sell some, or all, of their letting property because of rising rates.
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