Buy-to-let property Investor Trend Changing

There has been a change in the Buy-to-let property Investor Trend. Now, the average landlord in the UK is now spending less on property purchases. Buy-to-let property Investors are now seeking out seeking out lower valued properties; therefore, seeking better yields. Property investors are now seeking to invest in areas where property prices are low; but rents are relatively high in comparison.

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Buy-to-let investor portfolios where previously London focussed in recent years. Landlords were attracted by the high-income level that properties in the capital could achieve in monthly rents. However, now due to substantial growth over the last 5 years in the capital; yields have been compressed compared to the high purchase values, leaving monthly returns relatively low.

Investors Driven by Higher Yields

The Buy-to-let property Investor Trend, According to Mortgages for Business, is changing. There are far more landlords calculating yields and assessing the yield potential before buying property in the UK. They are searching lower priced property for sale, with a higher monthly rental as a percentage of purchase price. Furthermore, It said that in 2017, and particularly Q2 of the year, the average buy-to-let mortgage purchase was far lower than the average house price. “Landlords have been selective with their purchases this quarter, choosing properties that maximise their income with minimal investment. This strategy is likely to remain common as it allows landlords to maintain profitability while HMRC phases in restrictions on income tax relief for landlords,” said Steve Olejnik, chief operating officer of Mortgages for Business.

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Q2 of 2017, also showed a change in how landlords are looking to expand their portfolios. Therefore, the Buy-to-let property Investor Trend is shifting to lower value higher yielding property investments. Furthermore, Mortgages for Business found that the average UK property investor reduced their investments in the past three months, buying fewer homes than they were in the quarter before. This is in-line with the general dip in activity during a General Election, which is customary to see international investors and domestic property buyers, adopt a wait and see approach.

Where are Property Investors Buying?

Property Investors who do not want to expand their portfolio, too far from the capital are seeking property opportunities for sale in Greater London. Therefore looking in places along the commuter belt areas outside of zones 1-4. Furthermore, the Northern Powerhouse cities Manchester and Liverpool continue to attract investors due to the yield and growth potential. Click Here to See Our Portfolio of Opportunities