Landlords get better returns

Landlord’s confidence in the buy to let sector is at a record high, average yields are increasing and landlords planning to purchase more property.

Surveys show that even with rising interested rates landlords are confident with their investments. Tennant’s demand is higher than supply, landlords have increased rents as the interest rates and house prices have got higher. Property investments are still good and investors with three or more properties rose from 6.1% in February to 6.3% in August.

Those landlords whose major income is in buy to let properties are now planning to increase their portfolios some have been able to already by buying when house prices slowed.

Properties at Auction

A rise of 32% of homes going under the hammer at auctions was due to affordability caused by the interest rate rises. During the second quarter of 2007, 5120 residential homes sold at auction, that is the highest number in two years and a rise of 22% on the previous quarter.

The number of repossessions due to the rise of interest rates also shows at auction. It has been estimated by The Royal Institution of Chartered Surveyors that repossessions could rise to over 45,000 in 2008.

It is considered that with housing costs taking up a very high percentage of incomes more repossessions are likely. Repossessions that sell at auction very often are sold below value and those with funds are snapping up bargains at others misfortunes.

Some buy to let investors are having to sell property because rising costs mean they are unable to afford to keep as many properties in their portfolios as before. A few have to sell properties at a loss.