The buy-to-let sector continues attracting greater numbers of new landlords, thanks to affordable mortgages and a very healthy rental sector. And while many new landlords are being enticed to sign up with the country’s re-invigorated mortgage lenders, most of the new funding is going to existing landlords.
Of all the buy-to-let transactions from January to March this year, 69% were remortgages – a substantial rise on the 43% over the preceding three months. These figures are from buy-to-let mortgage broker Mortgage for Business.
Rent yields strong
According to Countrywide’s letting index, all parts of the country observed first quarter year-on-year rent rises, except Scotland and the south east; a 2.6% and 1.1% drop respectively.
The most profitable properties, according to Countrywide’s figures, were one and two bedroom properties, which offered tantalising yields of 6.8% and 6.4% respectively.
The other key factor is low cost mortgage availability, thanks to the Government’s Funding for Lending scheme, now well underway. But the buy-to-let business has been booming since before this, demonstrating that the sector is the go-to business for many who wish to generate a stable, long-term income.
Doing the sums
But the experts advise caution, especially to those new to the sector. Before purchase, in-depth analysis should be carried out to ensure there is a readily available pool of tenants. In addition, landlords need to do their homework as regards purchase and operational costs. Landlords buildings insurance (available from click4quote.com), general repairs and fixing things like broken boilers can all add up