Credit crunch may benefit landlords

Buy-to-let property investors may see an upside of the global credit crunch.

Following problems in the US sub-prime mortgage market, which were triggered by lenient lending practices, many firms have tightened their lending criteria.

It means that they will be a lot stricter about who they lend to and how much they let them borrow.

This will inevitably lead to fewer people entering the property market but Savills points out that it is a good thing for those with buy-to-let mortgages.

"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 the firm's residential research director Jim Ward.

"We're anticipating that there will be much more sensible lending criteria both in terms of risk margin, but more noticeably in terms of loan to value and serviceability.

"Which is what the market needed, to be quite honest. It removes one of the risks of overheating," he added.

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