Landlords may prosper from credit crunch

The current credit squeeze may have a beneficial impact on the buy-to-let sector.

Savills says that landlords may benefit from the fact that some lenders have tightened their lending criteria as it means that more people will be seeking rented accommodation.

The credit crunch came about as a result of lenient lending practices in the US, with the after effects being felt throughout the world.

Lenders handed out sub-prime mortgages to people with poor credit histories and low incomes.

The outcome was that hundreds of thousands of people defaulted on their mortgages when interest rates rose, causing chaos in the markets.

Lenders in the UK are keen not to see a repeat in this country and that is why some have tightened their lending criteria.

But, according to Savills, it may be buy-to-let investors who benefit.

"It will strengthen rental demand, but that's no bad thing if those people are not taking on mortgages that they could otherwise struggle to pay," said Jim Ward from the firm.

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