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Mortgages -
Moneyfacts: Crunch fears for buy-to-let - 28/02/2008
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The credit crunch will directly affect buy-to-let mortgage investors this year, a financial website has claimed.
According to Moneyfacts.co.uk, lenders have tightened-up their criteria significantly in recent months.
On average, the initial deposit on a rental home required by building societies and banks has gone from 17 per cent to 20 per cent between late 2006 and late 2007.
This means that buying a home has become more costly for the investors, despite slight house price falls in recent months.
Keeping deposits low is especially important for by-to-let investors, who wish to avoid paying extra tax.
Commenting on the figures, senior analyst at Moneyfacts.co.uk Alan Harper said: "Moneyfacts.co.uk research shows that landlords have not escaped the fallout from the credit crunch.
"For individuals who are not existing homeowners and who are looking to buy-to-let on their first property, the market is…restrictive."
Mr Harper added that around half of all buy-to-let lenders, made nervous by the ongoing effects of the credit crunch, now won't lend at all to first time buyers.
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