THE March 2003 edition of Paragon Mortgages’ Buy-to-Let Trends survey provides fresh evidence that buy-to-let lending remains at comfortable levels relative to property valuations, quelling concerns landlords may be becoming financially stretched.

The survey shows that less than five per cent of landlords have loans exceeding 75 per cent of the value of their investment property portfolios, while only 0.5 per cent exceed 90 per cent loan-to-value. The average loan-to-value is just 42.7 per cent, a modest decrease as compared with three and six months ago (43.9 per cent and 43.3 per cent respectively).

Over the past quarter, landlords have experienced a small reduction in their gross return (from 8.6 per cent to 8.5 per cent), suggesting the downward pressure on letting yields is abating as the boom in property prices ends. A modest increase in void periods (from 2.5 weeks to 2.9 weeks per year) will also have contributed to lower returns.