About 10% of rented property in the private sector is now provided via buy to let mortgages. This represents a significant slice of the mortgage market for lenders with benefits to borrowers of competitive interest rates moving even closer to standard mortgage rates.
Since buy to let was introduced in 1996 the dramatic growth of the market has run parallel with the growth in the property market, pushed on by the drop in interest rates and the poor performance of alternative investments.
This increased supply together with tenants moving towards buying has put a downwards pressure in demand within the rental market leading to very competitive rental levels and ever increasing emphasis on the type, location and quality of the let property to obtain the necessary returns. It has also meant a shift of emphasis from income yield to capital growth over this period.
Now, as the market begins to shift again and interest rates rise it is even more important to plan your investment strategy. Do you go for higher value lower yield properties with the expectation of greater capital growth potential or lower value properties with a higher income yield and more modest capital growth potential?
Professional advice is a must!
As chartered surveyors we know our market intimately from both the sales and letting side so our advice should form the cornerstone of your decision making process.
The funding can also impact significantly on the viability of such an investment and again, the correct advice is most important to guide you through the complexities of the mortgage market. We have links with Malcolm Ramsay of Ramsay Asset Management who can provide advice and expertise on the wide spectrum of financial services as well as specialist knowledge of the buy-to-let mortgage market. He can be contacted at 7 South Charlotte Street, Edinburgh, EH2 4AW or by telephone on 0131 220 7717 or email at mramsay@ramsayassetmanagement.com
Please contact our Partners Colin Dove or Fraser Crichton for further information on buy-to-let.
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