Landlords looking for more buy to let borrowing

boom in buy to let mortgages is encouraging more landlords to think about extending their property portfolios.

The Council of Mortgage Lenders, the trade body for buy to let lenders, says an extra £6.25 billion will be available next year for landlord mortgages.

That will take the expected amount available for borrowing to £25 billion.

And according to a survey by online letting agent Makeurmove, a quarter of landlords want to take advantage of the new money to expand their property businesses.

As HM Revenue & Customs reckons the market comprises around 1.4 million buy to let landlords, that means around 350,000 are looking to buy new homes to rent out.

The study also disclosed buy to let is buoyant with landlords reporting –

• 59% enjoyed buy to let yields of between 4% and 8%

• 25% achieved yields of 8% or more

• 33% have borrowing of only 20% of the value of their portfolios

• 60% expect buy to let home prices increase during 2014

Rising mortgage interest rates is the only fear many landlords have for their property businesses.

Director Richard Francis said: “Our research demonstrates that landlords are feeling positive about the buy-to-let market, having hopefully seen the back of restricted finance and rising rent arrears. The news that that buy-to-let lending will reach £25 billion by the end of 2014 is an indication that the buy-to-let market is starting to grow again.

“Rents are rising across England and Wales, with the average price paid by private tenants reaching £757 a month. With a growth is demand for quality rental accommodation from the fastest growing group of private tenants aged 35-44 year old, landlords can look forward to a more profitable year ahead if they capitalise on this market opportunity.”

Meanwhile, nationwide estate agents LSL Properties, owners of chains including Reeds Rains and Your Move, forecast average house prices will have risen 16% across England and Wales in 2013.

Article courtesy of LandlordZone

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