For what has been a tough year for landlords and letting agencies in the UK, at last there is good news to finish the year. There has been a further drop in typical costs of buy to let mortgages over the past three months.
Mortgage Brain states that the cost of a two-year Fixed Buy to Let mortgage (with an 80 per cent loan to value) is now 4% lower than it was in August 2016. With a current rate of 3.34 per cent, as of November 1, the reduction in cost means a potential annual saving of £324 on a £150,000 mortgage. Data from Mortgage Brain also reveals that buy to let mortgages have seen an 11% decrease in comparison to November 2015 – equaling to be a potential annual saving of £1,098.
It’s no secret that landlords can earns higher returns, up to 6.9% according to thisismoney, when buying property in university cities as they offer low property prices and strong demand for rental accommodation. With an ever evolving lettings industry landlords must be savvy about where they purchase. Newcastle and Northumbria University sat 8th out of 19 university cities that landlords will potentially see the best returns, with an average gross annual yield of 6.6%.
The month of October has experienced a surge in new Buy to Let listings, which is encouraging despite landlords taking steps to avoid the impact of tax changes that come into effect next year. A Study by mortgage lender Kent Reliance discovered that ‘landlords were restructuring their portfolios to escape higher taxes on their rental income, which will be phased in from April 2017. Some landlords have set up limited companies, it said, while others have increased rents or transferred properties to family members.’
When it comes to letting property, especially during this changing market, knowledge and understanding of the local markets, tenant demands and legislation is key to success. We offer valuable property advice and support, if you wish to speak to our experienced team contact us here.