I think you have the bias, that is why you cannot see the reality that actually
lower LTV makes more people become marginal investors and
causes the higher probability that more people will end up getting their property auctioned off by banks when crash time comes!!!!!!!.........
So FACT: Lower LTV for property doesn't mean investing in property is safer for the investor (in fact, is make it more dangerous)!
Let's look at the 2 scenario for the same person:
1) LTV 80% on 2nd loan
2) LTV 60% on 2nd loan
If the person is able to afford LTV 60%, that means he can afford LTV of 80%.
In the second scenario, may be the person just have 40% cash (vs property price) and put all down into property and left little cash for emergency (eg lose job, no tenant, which are all likely to happen at the same time when time is bad (eg global financial crisis and global economic recession)!
Now compare to 1st scenario when the person put 20% downpayment and still hold 20% cash, in this case he will have cash to withstand losing job, having no tenant for his investment property etc.
So conclusions:
1) Lower LTV causes more people to become marginal property investors!
2) Lower LTV likely will cause more people to end up their investment property being auctioned off at cheapskate price by the bank when crash time comes!
Now, given above facts, who really want to have lower LTV and how can lower LTV make investing in property safer???