Buy to Let Continues Surging
Parmdeep Vadesha
September 04, 2008
In recent times, the buy to let business has come under fire. Yet for all the insinuations that the market is in big trouble, the idea that property investors should flee in reaction to the current stabilisation of the property sector has been generally disregarded. Even though it may be the case that some investments have stagnated, specifically those based on the concept of a quick profit, those investors who have invested in property for the long run have every reason to stay in the market and take advantage of the best opportunity to buy cut price properties for almost 20 years.
The latest report from Paragon Mortgages that reveal rents have been rising in the face of a declining residential buyer market. In the latest batch of figures, the average rental yield was 6.4 per cent while the buy to let index showed that the average rent in the past year has increased by 12 per cent. Paragon says that strong tenant demand has been driving the rents upwards thus allowing landlords to attain greater yields than they have witnessed for over a couple of years.
It is for this reason that the buy to let market is carrying on. Homemove.co.uk reported that recently in Southampton, an investor spent £110 million on a block of 169 flats to rent out. Delph Property Group, the company that dealt with the transaction, believes the lettings industry in the city is well on its way to performing well.
For the would-be landlords, experts give the following buy to let advice.
1. Pick up one of the increasing numbers of repossessed buy to let properties appearing at auction. Do a little investigation as to why the properties have come to be there. When you decide to make a purchase, make sure that your credit record is impeccable since lenders are growing increasingly anxious about lending to people with bad credit.
2. Obviously you need to choose your property and location carefully. If you plan to target the family market then you should go for spacious homes located near good schools, good transport links and recreational areas. You can check the actual sales price of similar houses with the Land Registry for £3. Also use nethouseprices. As to the rents, your local letting agents will be your best source of information.
3. Find tenants and run the property yourself. Hiring agents to manage your property would require you to shell out around 10 per cent and higher to take charge of tenants and a up to 15 per cent if you want them to handle the property affairs. If you think you´d rather have agents deal with it, at least make sure that the agent is registered with the National Association of Estate Agents or Association of Residential Letting Agents.
Buy to let is an appealing alternative as an investment in your future. Thus you have to make sure that you take appropriate buy to let advice before you make the decision to buy.
The latest report from Paragon Mortgages that reveal rents have been rising in the face of a declining residential buyer market. In the latest batch of figures, the average rental yield was 6.4 per cent while the buy to let index showed that the average rent in the past year has increased by 12 per cent. Paragon says that strong tenant demand has been driving the rents upwards thus allowing landlords to attain greater yields than they have witnessed for over a couple of years.
It is for this reason that the buy to let market is carrying on. Homemove.co.uk reported that recently in Southampton, an investor spent £110 million on a block of 169 flats to rent out. Delph Property Group, the company that dealt with the transaction, believes the lettings industry in the city is well on its way to performing well.
For the would-be landlords, experts give the following buy to let advice.
1. Pick up one of the increasing numbers of repossessed buy to let properties appearing at auction. Do a little investigation as to why the properties have come to be there. When you decide to make a purchase, make sure that your credit record is impeccable since lenders are growing increasingly anxious about lending to people with bad credit.
2. Obviously you need to choose your property and location carefully. If you plan to target the family market then you should go for spacious homes located near good schools, good transport links and recreational areas. You can check the actual sales price of similar houses with the Land Registry for £3. Also use nethouseprices. As to the rents, your local letting agents will be your best source of information.
3. Find tenants and run the property yourself. Hiring agents to manage your property would require you to shell out around 10 per cent and higher to take charge of tenants and a up to 15 per cent if you want them to handle the property affairs. If you think you´d rather have agents deal with it, at least make sure that the agent is registered with the National Association of Estate Agents or Association of Residential Letting Agents.
Buy to let is an appealing alternative as an investment in your future. Thus you have to make sure that you take appropriate buy to let advice before you make the decision to buy.
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