Investing in buy-to-let is easier than ever with a bigger range of mortgages

Investing in buy-to-let is easier than ever with a bigger range of mortgages

According to recent reports, investment in the buy-to-let market in the UK is now so popular that landlords are propping up house prices. The one per cent rise in asking prices that was in evidence in March, which took prices to just £30 shy of last summer's peak, was largely down to the fact there are now more people buying homes to let them out.

The reasons for this are simple - yields remain high, and as people remain either unable to buy or reluctant to spend at the moment, demand in the private rented sector remains very high. So buy-to-let property is a very savvy way to invest money and turn a very good profit. 

And according to the latest Buy to Let Mortgage Costs Index from Mortgages for Business, it is now easier than it has been at any time in the last few years to get a piece of this lucrative pie, with landlords able to choose from a bigger range of mortgage products than ever before. 

In the first quarter of 2015, there are some 187 buy-to-let purchase loans available in the UK property sector, which is up by 16 per cent compared to the three months prior. 

"This unprecedented pick up reflects the huge increase in demand as well as the wider importance of the buy to let industry," said David Whittaker, managing director at Mortgages for Business.

"Looking at total lending in 2014 the trend is clear. For a second consecutive year the value of the buy to let market grew by almost a quarter. We anticipate further growth in 2015 but at a slower rate as the market takes an inevitable breather after such a huge sustained spurt," he added. 

So with so many mortgage products around, the choice is better than ever before, and it leaves prospective landlords dealing with a rather happy headache. So if you are going to get yourself onto the private rental ladder, what sort of mortgage should you be looking for at the moment?

According to the company, with the base rate remaining low at the moment, fixed rate products are performing far better for mortgage customers than their tracking counterparts, particularly for those getting in at the cheaper end of the market. 

At two, three and five-year levels, low loan to value mortgages are outperforming the equivalent tracking alternatives. 

"It’s astounding that fixed rate mortgages are already better value than their respective tracker counterparts. Again the real advantage is for the ‘safest’ landlords with the lowest LTV loans. But even though tracker products are a little bit cheaper at higher LTVs, in these cases too it soon won’t be enough to compensate for the likely increase in cost of trackers when rates inevitably rise," said Mr Whittaker. 

And it's the same higher up the ladder as well, with fixed rate medium loan to value mortgage products being 0.3 per cent cheaper than their fixed alternatives, and in the same vein, high loan-to-value fixed products average out at 0.4 per cent cheaper. 

It means that 99 per cent of landlords are now opting for longer than one-year initial periods, as clearly fixing rates where you can offers the best prices for those buying to let. 

Are you looking to invest in buy-to-let property in London? We believe that landlords should be able to get all the fantastic rewards and benefits of letting their property in London without the time and complications that can come with it. To find out about how you can let us handle your property rentals, go to our landlords page or call 0203 355 0819.

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