Landlords honing in on lower value properties

Landlords honing in on lower value properties

With the hike in stamp duty rates and the impact of mortgage interest tax relief cuts, it’s no surprise that landlords have started to hone in on lower value properties to lessen the blow on their finances. According to data from the Mortgage Advice Bureau, there has been a notable upward shift in searches for properties that are valued less than £150K and a downward shift in property searches over £250K.

Taking a snapshot between July and September 2015, property searches under £150K rose by 14% whereas searches for properties over £250K dipped by 20%. The Mortgage Advice Bureau carefully tracks 250,000 monthly mortgage product searches on price comparison sites to arrive at this data.

Interestingly, the data also reveals that there has been a shift away from searches in London and the South East to other parts of the UK. This demonstrates the geographical shift that many landlords are making as London becomes too expensive and yields not so lucrative.

Landlords continue to enjoy low mortgage rates and by taking out equity on their existing portfolio, they are starting to invest in lower value properties outside of the capital. The demand for property across the UK means that the landlords can still achieve good rental returns on properties that have been significantly cheaper to buy.