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Buy-to-let investors looking for lower value homes
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
New research indicates that buy-to-let investors are looking for lower-value properties, in an attempt to gain higher yields.
The latest Mortgage Search Tracker from the Mortgage Advice Bureau shows seven in ten landlords are actively searching for a mortgage on properties valued at less than £250,000. This indicated a sharp rise from the five out of ten recorded one year earlier.
Falling rates
A growing number of landlords are choosing higher loan-to-value (LTV) mortgages, with interest rates continuing to tumble. One in three landlords are looking for mortgages on properties with a value of less than £150,000.
This trend comes as house prices continue to rise, up by 5.2% over the last year. In London, the South East, South West and East of England, average property prices are more than £250,000.
Buy-to-let investors looking for lower value homes
‘As rental demand remains strong nationwide, opting for a cheaper property can result in more attractive yields,’ noted Brian Murphy, head of lending at the Mortgage Advice Bureau.[1]
‘It appears many landlords are looking to invest in areas outside the South of England, where property prices won’t hold them back from making a profit,’ he added.[1]
Murphy went on to say that buy-to-let investors are reaping the rewards of more competitive pricing. ‘Although higher LTVs generally mean more costly monthly repayments, falling rates mean landlords may find they can now afford higher-LTV products,’ he concluded. [1]
[1] https://www.landlordtoday.co.uk/breaking-news/2015/11/landlords-targeting-cheaper-properties
