Market Update – Autumn 2014
Check out our latest news and views:
Yields on Buy to Let Investments
HSBC have recently published an interesting report on average rental yields in the top 50 buy to let “hot spots” in England and Wales. Southampton is top of the list with an average gross rental yield (annual rent divided the value of the property) of 7.8%.
Bristol comes in exactly half way down the list at number 25 with a yield of 4.9%. The only other town and cities in the South West to make the top 50 are Bournemouth (5.8%) and Exeter (4.4%).
Just over the water Cardiff looks to be an attractive proposition with a yield of 6.4%. The lowest yields in the top 50 list are mostly London boroughs where high property prices depress average yields.
Bristol’s strong performance in yields is all the more impressive because it is currently one of cities outside of London with the highest growth in house prices. It’s a good time to invest in this wonderful city!
The Mortgage Market
The main recent change in the mortgage market has been the introduction of the Mortgage Market Review. This imposes more stringent affordability tests on home buyers but it will not directly affect the availability of mortgages for buy to let investors. This is borne out by a month on month increase in buy to let mortgages of 4% in May this year.
Some commentators have speculated that affordability tests will extended to buy to let mortgages in some form and whilst there no immediate prospect of that happening it may focus the minds of some investors on securing new mortgage finance while interest rates remain low and loan to value rates are comparatively high. It’s time to review your finances!
Apart from reviewing your financial options it is always a good idea to periodically review your overall property strategy. There may be options that you have not considered in the past that will create a more balanced portfolio. For instance have you thought about rent to rent (no capital investment needed) or a joint venture to acquire a share in an HMO property?
For further information and advice contact Del on 07836 558 206 or email [email protected]
The Property Options Team