Landlords opting for cheaper properties

Landlords opting for cheaper properties

New analysis from leading mortgage broker Mortgages for Business has revealed that landlords are opting to buy cheaper properties than they have historically to boost their portfolios. Although cheaper, these properties have performed very well when it comes to yields and illustrates how landlords are looking long and hard at their investment properties to achieve maximum return on investment.

By analysing the buy-to-let mortgages that had been arranged via Mortgages for Business in Q2 they quickly discovered that the values of the properties were less than those recorded in previous quarters. However, these lower value properties are providing better returns, with both HMO and multi-unit purchases achieving average yields of over 10%.

Chief Operating Officer of Mortgages for Business Steve Olejnik said : “Landlords have been selective with their purchases this quarter, choosing properties that maximise their income with minimal investment. This strategy is likely to remain common as it allows landlords to maintain profitability while HMRC phases in restrictions on income tax relief for landlords.”

The analysis clearly shows that landlords have scaled back their investments from last quarter with Q2 seeing a fall in the number of buy-to-let purchases compared to Q1. If you are a landlord looking to increase your portfolio with lower value properties that deliver high yields, please get in touch. We can advise on where the best opportunities are.