causes of the relentless increase over the recent
centuries in the UK's population - now projected
to pass 70 million within 25 years - are many
and varied. They range from medical advances
and growing individual prosperity to greater
life expectancy and the waves of immigration.
is such a strong story for investors buying property
in the UK! Huge pressure on rents and upward pressure
on values as credit improves. While credit is still
not easy to come by, compared to this time last year
there are more products, and loan to values have increased.
We now have The Mortgage Works who have gone from 70%
to 80% LTV, and several brand new lenders such as Aldermore
offering good buy-to-let products, so there are certainly
more options for investors again.
direction will credit go?
Undoubtedly more lenders will come on the market - and
I would expect in another year LTV for buy to let to
improve further - with LTV on new build apartments most
likely increasing to at least 70%, and at least one
other lender offering 80% LTV.
is no doubt home ownership is very much the culture
in the UK - but the rental market is booming for investors.
Residential property with reliable yields is becoming
more and more attractive - with some big players that
were concentrating on commercial investing, now realising
the benefits of residential property, and banks are
certainly happy to lend to them.
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know one developer who has recently sold over 600 properties
to one such group who were delighted with the 8% yields
they are getting and the discounts giving them instant
equity. I have seen some investors who bought a few
properties at the peak, who are now making the most
of the discounts and are buying a lot of properties,
building up their equity levels again while others are
sitting on their hands and not buying - make sure you
are one of the investors making the most of the conditions!
As an investment and making the most of current conditions,
property is an excellent vehicle, as the Sunday Times
Rich list shows us every year. This should give you
excellent confidence, and knowing the demand for property
and the issues with supply, gives me excellent confidence
to keep buying as many buy-to-let properties as I can
finance, following the rules below.
for these basic rules:
Only buy for buy-to-let where the rent you will
receive is at least 125% of the mortgage payments
at around 6% based on 75% interest only mortgage
for at least 15% discount on current RICS open values.
If it is impossible to achieve this in your local
area e.g. in your area the rents do not achieve
this coverage then do not force it - find an area
of the UK where you can achieve this - there are
plenty of areas still offering excellent yields,
giving positive cashflow.
You can contact one of our Portfolio Development Managers
on 0115 9853963 or by emailing email@example.com
to discuss investment opportunities, and make sure you
take any negative newspaper headlines with a pinch of
salt, the facts are, we need more houses in this country,
the rental market is very healthy, and interest rates
will stay low for the foreseeable future to provide
stimulus to the economy!