High Yields and Low rates make the Buy to Let Industry an Investor’s Dream

29 August 2012 Categories: News

High Yields and Low rates make the Buy to Let Industry an Investor’s Dream

Financial experts this week have been backing the buy to let industry as an investor’s dream after double-figure rental yields were reported for the first time. Landlords in some areas of London are currently experiencing 11% rental yields, while the average for England and Wales isn’t far behind at 8.9%. These attractive figures are partly due to lower mortgage repayments but mainly they reflect the large increases in rental amounts that have been seen over the last 18 months.

Add to this the low buy to let mortgage rates being increasingly offered by lenders, the higher LTV mortgages also now available, the constant high demand for private rental sector properties and the inability of younger house-hunters to secure a home owner mortgage for their own property and potential investors seem to have it made.

Even so, experienced landlord Mark Frankland, who recently bought his 6th rental property, warned that there are still risks involved, “I’m looking for properties that meet my criteria, one of which is a high level of ongoing return after mortgage costs.  The risks are that values will fall, mortgage rates will rise and tenants will default. But with careful choice of property and good management, you can minimise these risks. It’s a business.”