50% of landlords want to buy more homes

More than half of buy to let landlords want to cash in on the rental boom by buying more homes in the next six months.

Just 6% plan on selling rental homes – and the rest have no plans to buy or sell,  according to a report from a mortgage broker.

Research from Mortgages for Business also shows:

  • Average buy to let gross yields are 6.7% a year
  • 26% of investors are considering buying a house in multiple occupation (HMO)
  • 16% may buy blocks of self-contained flats

“Tenant demand for residential property is ballooning thanks to the lack of mortgages available to first-time buyers,” said the firm’s David Whittaker.

“Every month more and more would-be buyers are being forced to rent, and this is pushing up demand to astronomical levels, producing very attractive gross yields for landlords as a result.”

The intentions of buy to let investors are echoed by separate statistics from a leading firm of valuers.

Surveyors inspected 33%  more buy to let properties in 2012 than in 2011, and the number of surveys surveys was up 22% in December compared with 12 months earlier, despite an expected seasonal drop from the November figure, said Connells.

The data showed 14% of valuations during the year were for buy to let homes, compared with 11% in 2011.

Director John Bagshaw said: “2012 was the best year for the valuations market since the credit-crunch began.”

Meanwhile, buy to let lenders are jockeying for market share after a round of rate and fee cuts.

Lenders BM Solutions, Mortgage Trust, Leeds Building Society and the Aldermore Bank have all announced new landlord loans for remortgage and purchase, ranging from 60% to 80% loan-to-vale deals.

The Islamic Bank also reports a flood of customers taking out Sharia buy to let loans, which let investors pay rent rather than interest on 75% loan to value mortgages.

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