Mortgage lenders traditionally required a "buffer" of rental income cover in excess of the mortgage interest repayments. This was 130 per cent between 1998 and 2004 but fell to 127 per cent in 2005 and 125 per cent in 2006, according to Council of Mortgage Lenders (CML) figures.
This suggests that landlords are stretching themselves further in a bid to try to make money from their investment, and that lenders are becoming more lenient in the way they apply their criteria.
The two are a dangerous combination.
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