By BTL mortgage broker, Mortgage for Business says that with the property market in England reopening, landlords should be poised to expand their portfolios – especially in London and the Home Counties.
The government has set out plans to restart England’s housing market. Estate agents can now open, viewings can be carried out, and removal firms and conveyancers can restart operations.
Steve Olejnik, managing director of Mortgages for Business said: “We can’t know exactly what’s going to happen to the market, but we expect a temporary, short-term fall across London and the south east in the region of about 15%. But there’s no question that if you invest in bricks and mortar now, with a bit of haggling during the process, you are going to see a lot of long-term capital growth. I think values will be back at February 2020 levels by the spring or summer of next year. Landlords who have not asked for a repayment holiday will be well set to snap-up some bargains with the help of lenders who have demonstrated a willingness to lend since the third or fourth week of the pandemic.”
The BTL specialist suggests there are two areas where landlords can bag bargains.
The first area is vanilla buy-to-let properties that are going to be priced very competitively. Vanilla BTL properties yielded 5.7%, on average, last year.
The second area is Houses of Multiple Occupancy (HMOs). HMOs mortgages have comparatively low mortgage rates currently with 5-year fixed rate mortgages available on larger HMOs at between 3.5% and 4% with lower rates available on shorter terms as well as smaller HMO properties. Last year, of all the different property investment options, HMOs produced the highest yields on average – 9.2%. Over the medium term, that will mean HMOs will continue to be popular with landlords.
Steve Olejnik concluded: “Yields from the various types of property remained pretty steady throughout 2019 and suggest property will offer a better return than many other investments in the future – especially to smart, professional landlords looking outside the box at HMO investments. Talk to your broker now. If you want to grow your portfolio, you will want to build up a war chest when you next remortgage and should look to refinance for capital.”
Property investors and landlords who want advice on BTL mortgages can call Mortgages for Business on 0345 345 67 88 or email enquiry@mortgagesforbusiness.co.uk.
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