Mortgage Works increases maximum LTV

The buy-to-let mortgage market has been boosted by the announcement that The Mortgage Works is to increase the maximum loan-to-value on its products to 80 per cent.

After raising this cap from the previous level of 75 per cent, the lender has become the first in the UK to offer such a deal.

The move is "very good news", according to Lee Grandin, managing director at Landlord Mortgages.

He said The Mortgage Works' decision indicates that confidence is gradually returning to lenders.

"To move the goalposts to 80 per cent loan-to-value is a fundamental shift in lenders' attitudes to risk because, of course, their stake in any property is that much higher and therefore the risk is that much higher," Mr Grandin said.

He added that, although the step is unlikely to create an "enormous uptake" in business levels, it is likely to increase competition and lead to a "better environment for landlords".

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2010-05-11 12:09:50 © Moneyextra.com