Buy to Let is designed to stimulate the growth of the Private Rented Sector by encouraging private investors to take the opportunities given by low, highly competitive, interest rates and the reasonable certainty of sustained capital growth over the coming years. The private rental sector is thriving and offers outstanding investment opportunities. Owning flats and houses for rent provides the combined benefits of rental income and capital growth. The rental sector is widely predicted to grow at a significant rate for years to come.
Buy to Let property as an investment has been one of the boom sectors over the past few years. Contrary to recent press reports this industry is still thriving in Northamptonshire. Lets Rent have been advising and professionally supporting investors for many years and have established a first class reputation for quality of service.
What's so different?
Historically, borrowing on income-producing property has been viewed by lenders as a commercial proposition. So, mortgages on property to let, even for private individuals, have attracted higher rates of interest than the standard mortgages offered to owner-occupiers.
In addition, until now, rental income has usually been disallowed when assessing a borrowers ability to meet mortgage payments.
Now, the view of many lenders and all other housing professionals is that growth in the private rented sector must be encouraged. Not only does it lag well behind the private rental sectors of all the other advanced economies, the lack of choice between renting and buying is, in fact, bad for the economy and a contributory factor to the booms and busts of the housing market over the last decades.
But, the change in lending criteria and the lowering of interest rates for private investors has only been made possible by the strong presence of professional, bonded letting agents in the lettings market.
What are the returns?
Gross returns - the rent received before taking account of the cost of letting - such as management fees, maintenance, service charges ground rents and insurance varies between 7% and 10%. This can be less for very expensive properties.
The average rental return in Britain today hovers around the 10% mark, and capital appreciation is likely to match, if not exceed, inflation for the foreseeable future.
As a rule of thumb, the gross rents should be between 130% and 150% of the monthly mortgage payments.
This page is for guidance only. The responsibility for the financial decision to Buy-to-Let can only rest with the investor. It should be noted that as with any investment, returns and capital values can go down as well as up; and the investor should be fully aware of the terms and conditions applied by the chosen mortgage lender.
For More Information
Call Now: 01536 51 22 77
or email: buytolet@letsrentproperty.com