Property investors target better yieldsMake Text Bigger
Property investors are targeting high-yielding HMOs and commercial property in a switch away from buy to let, according to a new survey.
Confidence in the property market is high – and up to 60% of landlords are looking at better returns from their investments over the next six months, says the report from a mortgage broker.
They are boosted by buoyant rentals and property prices starting to hold their own. Rather than buy to let rentals, landlords are looking at making more money from multi-let properties.
- 20% are turning to HMOs (houses in multiple occupation)
- 15% are investigating blocks of flats
- 14% are looking at commercial or semi-commercial (split commercial and residential) properties
All three give a higher yield than buy to let homes.
The problem most landlords face is raising the finance to carry out their plans as they will have to remortgage their homes and other rental properties to raise the cash for deposits.
Around 62% of landlords believe lenders are not supporting their investment strategy – while 20% believe banks and building societies should cut their mortgage arrangement fees, 18% feel loan to values should rise and 15% reckon personal underwriting would be better than computer scoring.
David Whittaker, managing director at Mortgages for Business, the firm that conducted the survey, said: “Although overall mortgage and lending to first time buyers is finally starting to increase, landlords remain confident about the future of the private rental market and plan to expand their portfolios over the coming months.
“However, more investors are exploring which options will give them the best returns on their investment. While buy to let properties remain popular, more complex deals are offering higher yields on average and are growing in popularity, particularly because of the shortage of housing stock currently on the market.”
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.