Research from Landlord Mortgages has revealed that 25% of landlords have refinanced over the last year to create ‘war chests’.
This is in anticipation of a softening housing market that will allow investors to take full advantage of lower prices.
Lee Grandin, managing director of Landlord Mortgages, says: “Landlords are preparing themselves for a much publicised softening property market by refinancing their portfolios rather than trimming them down.
“The benefits of this are two fold, as investors avoid capital gains liabilities and put themselves in a strong position to snap up potential bargain properties if the property bubble bursts.
“The experienced landlord will be taking advantage of this ‘cheap’ money and will be ready to make the most of an uncertain market.
He adds: “At Landlord Mortgages we are seeing a great deal of ‘pound cost averaging’ in the landlord community whereby investors even out house price fluctuations by buying at regular intervals, thus averaging out the returns over a longer period of time.
“For those landlords whose portfolio needs external management, fees will be a factor in keeping margins to a satisfactory level and as a result landlords will need to review the deals their lettings companies offer.”