Landlords invest mainly in fixed-rate deals
Although recent a study has shown that most buyers are split almost exactly in half when choosing between a variable or fixed-rate mortgages, landlords are not so indecisive, according to research.According to Paragon, as many as 70 per cent of buy-to-let investors have opted for fixed-rate deals, safeguarding themselves against a much anticipated rise in the interest rate.Even though fixed-rate mortgages can be slightly more expensive than variable-rate deals, prudent landlords choose to protect their rate for the long-term. Nigel Terrington of Paragon explains that the knowledge that your mortgage rate is fixed and will not increase means that landlords have to confidence to maintain their investments, even if house prices do start to drop or slow as predicted."If landlords believe that prices will drop by even 20 per cent, they will sit on their hands until prices have stabilised, then take advantage of the lower prices to buy," Mr Terrington told the Independent."Landlords will not sell, they are adamant about that. They are buying for the long term, and they don't have to move in the way that owner-occupiers must occasionally."Furthermore, according to Paragon's files, landlords have shown in the past that they are able to deal with blips in the market. During the 2004/5 drop in the housing market, the mortgage redemption rate actually fell, demonstrating that although landlords not refinancing to add to their portfolio, they certainly weren't selling existing property either.
Share this..
Related stories
UK at risk of housing market crash, says IMF
Britain may be in for a drop in house prices, in a situation similar to that currently being seen in the United States, the International Monetary Fund (IMF) has warned.The IMF said in its latest World Economic Outlook report that the UK was one of a number of European nations that could have to endure a crash in the housing market because of price correction.Also, the report highlights the dwindl...
Read MoreHypocrisy of the highest order at the FSA?
As the new chairman of the FSA settles into his new office and joins in the Labour Party led rant against the sky high wages in the City and excessive bonuses it seems as though the tenure of Lord Turner has hit a rocky patch already!
After joining the assault on the so called City fat cats it was pointed out to Lord Turner and the Chancellor Alistair Darling that Lord Turner himsel...
House price growth 'slowing'
House prices increased across all regions of the UK during the second quarter of 2007, but new research stresses that the rate of growth in the property market is slowing.The annual rate of house price growth increased from 9.5 per cent in the first quarter to 10.2 per cent in the second, according to the latest data from Nationwide.However the mortgage lender warned that the annual increase "mask...
Read MoreIs it time to look at your own small business?
In years gone by the number of people looking to start their own small business was just a fraction of the level of interest today. It seems that the internet and other advances in technology have allowed more and more people to work form home, many looking to set up their own businesses, but is this the time to look at working for yourself?
The truth is that with the onset of the...
Mervyn King backs radical changes in UK banking sector
Mervyn King, the Gov of the Bank of England, has today come out in support of Pres Obama's drastic move to control and restrict the power and growth in the worldwide banking sector. He believes that the UK needs a "safer and more robust banking system" and believes Pres Obama's move will prompt a wider debate about the pros and cons of the worldwide financial sector. If we take a step back to w...
Read More