The Buy to Let market continues to grow!

The Council of Mortgage Lenders (CML) latest snapshot of the buy to let mortgage market shows us that buy to let landlords haven’t been put off by the Chancellors announcements on the way buy to let properties are taxed.

Last month, the CML stated £1.4 billion was borrowed by UK landlords to purchase 10,500 buy to let properties, up 26.5% from the same month in 2014, when only 8,300 properties were bought with a buy to let mortgage. Go back two years and the number of buy to let mortgages used for purchasing (again not re-mortgaging) is 36.4% higher! Even more interesting has been the fact that the average amount borrowed has risen as well. The average buy to let mortgage last month was £133,330, up from £128,480 a year ago.

In Aylesbury, I am speaking to more and more landlords, be they seasoned professional landlords or first time landlords, as they read reports that the Aylesbury rental market is doing well, with rents and property values rising.  Interestingly, one landlord recently asked how much he should be paying per square foot (more of that in a second).

However, the first thing you have to decide is whether you want great capital growth or great rental yield, as every landlord knows, you cannot have both. Over the last twenty years, property values in Aylesbury have risen by 256.69%, compared to Greater London’s 436.2%. This has proved that capital growth increases faster in the more expensive Capital, but your investment money does not go very far, meaning there will not be as much rental yield from a one bed flat in Chelsea (2% per year at best) as there would be with a two bed semi in Aylesbury. However, whilst the figure of 256.69% is an average for the area, certain areas of Aylesbury have seen capital growth much higher than that and others areas not so well (we have talked about those in previous articles).

Clearly there are still many landlords coming into the market, regardless of potential tax changes in the future. There are various ways in which you can mitigate the potential tax changes and I would be happy to discuss some of these if you have any questions.

In the meantime if you are looking to buy, I will keep you in touch via this blog with the changes to the Aylesbury market place. As always consider very carefully your objective and whether or not the property and location you are buying meets the criteria needed to achieve your goals.

If you would like to discuss your investment plans or a proposed purchase, please don’t hesitate to get in touch. Pop into my office in Temple Street or email me at Ian@mortimersaylesbury.co.uk

You can find similar articles and information at http://theaylesburypropertyblog.blogspot.co.uk/