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Landlord confidence in buy-to-let mortgage finance returns to pre-crisis levels
April 16, 2014Article by Ray Withers
The UK’s buy-to-let sector has expanded massively in the past decade, now accounting for 16.5% of all households – some 3.8 million homes – in England, according to figures provided by the UK government. And with many priced out of the property market, the sector looks set to keep on growing, particularly in light of the latest findings on buy-to-let mortgages.
Buy-to-let investments are the hot topic in the UK investment market and now new research from Paragon Mortgages has revealed that landlord confidence regarding buy-to-let lending is on the up. The company’s latest data has shown that 44% of UK landlords said that finance was readily available during the first quarter or 2014.
The figure is 2% higher than for the previous quarter and puts landlord confidence in buy-to-let mortgage financing at its highest level since before the global financial crisis. It is in stark contrast to the 17% figure recorded back in the first quarter of 2011. Since that time, confidence has been rising steadily.
Maximising your investment
Many buy-to-let investors see mortgage financing as a key part of their investment strategy and property investment companies are used to seeing such mortgages used by clients to maximise their investments. Ray Withers, Chief Executive of leading property investment firm Property Frontiers, cites the company’s prime Birmingham city centre apartments as an example, explaining,
“Our clients are buying luxury, modern Birmingham city centre apartments, with investment from £104,500. They take a 12 month rent underwrite of 7% (expected yields are 8-9% based on comparable markets), then plan to refinance at 75% loan to value. This means that they receive all of their initial cash investment back (along with an element of tax-free profit) while retaining a further 25% equity in the property.”
Going with the flow
Investors in Property Frontiers Birmingham apartments, which are ideal for young professionals, are also able to enjoy the ongoing cash flow benefit of rental income, as well as the prospect of capital growth, particularly as plans for the HS2 rail link, which will cut London to Birmingham journey times to just 48 minutes, continue to unfold.
For those looking for an alternative to buy-to-let mortgage finance, but still keen to be a part of this massively growing market, developer finance presents a convenient and competitive option. In Bradford, Property Frontiers are offering superbly located prime city centre apartments, with investment from £50,000 for a one bedroom and £90,000 for a two bed. 50% loan to value developer finance is available, fixed at 3.25% for four years, providing investors with an excellent means through which to access the buy-to-let market.
Investors looking to know more about buy-to-let opportunities in the UK’s leading cities are invited to contact Property Frontiers or call +44 1865 202 700 for further details.