Landlord News

Buy-to-Let Special Report States “Increasing Shift Towards Areas with Higher Yields”

Em Morley - July 25, 2018

The Mortgage Lender has commissioned a special report, which has found that buy-to-let investors are increasingly on the look out for properties that are cheaper and result in a higher yield.

Martin Ellis, the UK’s leading housing economist, is the author of the report. He has also predicted a rise in interest rates by 0.25% within the next few months and that house price growth will increase by no more than 2-3% by the end of this year.

Peter Beaumont, The Mortgage Lender deputy chief executive, said: “Our special report on the buy-to-let market looks at the macro and micro economic environment for buy-to-let investors and the factors that are likely to influence landlords’ investment choices over the coming years.

“It also highlights the need for a flexible and competitive buy to let mortgage market to facilitate continuing investment in a sector of the housing market that has grown in significance as home ownership has declined and demand for good quality residential property has increased.”

Currently, buy-to-let mortgages represent nearly 13% of new mortgage lending in the UK. It has fallen by 28% in 2017 and is now at £10.7 billion, in comparison to £14.9 billion in 2016. However, despite this fall, 2017 still saw growth, with an annual average 67% higher than what it was in the period from 2009 to 2013.

Buy-to-let remortgage activity has also been stable, with the volume of lending in 2017 only 0.6% lower than it was in 2016.

There has been a considerable amount of growth within the private rented sector (PRS) in recent years. 4.7m households in England are currently renting privately, which amounts to one in five. 46% of those aged 25-34 years old live in the PRS. This is almost double the statistic from 2006, which stood at 24%. The amount of tenants aged 35-44 years old in the PRS has also substantially increased over the last ten years, from 11% to 29%.