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TODAY'S OTHER NEWS

Landlords targeting cheaper properties

Buy-to-let landlords are increasingly searching for lower-priced properties in a bid to secure higher yields, new research suggests.

Seven in 10 landlords are now searching for a mortgage on properties valued below £250,000, up sharply from just five out of 10 one year earlier.

And one in three are looking for mortgages on properties costing less than £150,000, according to the latest Mortgage Search Tracker from Mortgage Advice Bureau.

More landlords are opting for higher loan-to-value (LTV) mortgages as interest rates continue to fall.

The trend towards looking for cheaper investment properties comes as average UK house prices continue to rise, up by 5.2% in the past year.

London, the South East, South West and East of England all have average prices of more than £250,000.

Brian Murphy, head of lending at Mortgage Advice Bureau, said: “As rental demand remains strong nationwide, opting for a cheaper property can result in more attractive yields.

“It appears many landlords are looking to invest in areas outside the South of England, where property prices won’t hold them back from making a profit.”

Murphy said buy-to-let investors are benefiting from competitive pricing. "Although higher LTVs generally mean more costly monthly repayments, falling rates mean landlords may find they can now afford higher-LTV products.”

  • Andrew McCausland

    This is not news for those of us living in Merseyside. We have been marketing lower value properties to Southern based investors for some time now and have on average 5 groups a month visiting our offices in Wirral to view a range of options.

    There is a huge amount of inward investment into this area (Liverpool 2 deep water port, Wirral Waters £4 Billion development, the new conference centre and show venues, increasing work for Cammell Laird ship yard, Liverpool airport being the fastest growth airport in UK [according to the CAA], Burco Bank wind farm, the Golf Coast concept [anchored on the new Jack Nicholas course beside Royal Liverpool at Hoylake], Liverpool Waters and the £5 Billion redevelopment of Liverpool water front, the £200 million revamp of Europe's oldest Chinatown [in Liverpool] - the list goes on and on). All this is affecting trends in the local residential and commercial property markets.

    Those in the know are aware of all these changes and the benefits to the region. The old image of Merseyside based on events of 30 years ago (when Militant Tendency almost destroyed the city) no longer holds true.

    We have decent houses for under £60,00, many with sitting tenants giving investors an instant 8% yield. We have HMO's at under £150k giving a straight 15% gross. We have sourced, redeveloped and let properties that have given investors 30%+ ROI within the past 12 months. You don't get these sort of returns many places elsewhere.

    We all know the Chancellor has changed the dynamics for buy to let investors with his recent announcements. Despite this, maybe even because of this, the North West is still a great place to make a sound residential or commercial property investment.

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