Whilst first-time buyers continue to struggle to get their feet on the housing ladder, the buy to let market is witnessing the return of property investors.
The lack of contractor mortgage availability has pushed rents up and in certain areas of the UK rental yield is now as high as 8%. Findaproperty.com recently analysed the 50 top postcodes for buy to let investment and Southampton topped the list with a yield of 8.12%. Leeds was in second place at 7.52% followed by Virginia Water at 7.50%.
49 UK postcodes achieve returns in excess of 6% with 12 of these being in London. Private rental landlords enjoyed a buoyant start to the year. Rents have risen, tenant demand has increased and yields strengthened. High levels of demand for rental property are set to continue and the outlook for the buy to let sector is looking good, according to analysts.
Although the average asking price in most of the top 50 postcodes is well over £100,000, areas such as Grimsby and Hull yield 6.62% and average house prices are a more modest £69,635.73 and £75,310.53 respectively.
One buy to let mortgage broker, TBMC, reported a 62% year on year increase in mortgage applications for the first quarter of this year. Research from the company shows that London, Portsmouth, Sheffield and Brighton have been the top areas for buy to let investors in the last two quarters.
More mortgage lending companies, especially building societies, are starting to enter the buy to let arena although not all are relaxing their lending criteria just yet. In fact The Mortgage Works lowered the maximum loan it would give based on rental income last week. But on the whole, the buy to let sector is definitely showing marked signs of improvement.
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