Lower Gearing
Landlords with residential properties have helped themselves by reducing the gearing on the portfolios and therefore have hardly been affected by the rising rates and high borrowing.
Landlord’s portfolio gearing has dropped from 48% in 2002 to 38% in 2007. Those with three or less properties have an even lower figure at 25%.
People see a 6% yield and mortgage repayments at 6% and assume that landlords are making a loss. This is not actually the case as the average debt is 38% of portfolio value this makes the yield attractive. Most landlords are able to handle their businesses with great skill.
Buy To Let Property
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