With the changes in mortgage stress testing it is likely that you will need to have a 40% deposit to buy a buy to let property with a mortgage. Now if you want to buy the best property to let out it is likely to be a two bedroom house. That two bedroom house in a respectable location is likely to cost you £250,000 and above meaning that you need a deposit of around £100,000!
So if you are struggling to scrape together such a large deposit is it still worth trying to get in to the market?
Well if you consider a studio flat at around £120,000 you will need a deposit of less than half the above example, £48,000. What is even better news is that your yield (the return on money invested)will be higher than with the house (around 5.5% gross).
The downside is that your capital growth will be less but a studio property would still give you a better return than your average bank or building society. Five years ago these studio apartments were selling for around £80/£90,000 so there has been capital growth of around £35,000...not to be sniffed at. That equates to £7,000 per year or £134 weekly...not bad to supplement your income.
So yes you can buy in Aylesbury on a budget.
I talk to many landlords and some of them I have been talking to for years. Those that have committed to the market in the past have been pleased with the outcome. Those that have still yet to commit regret not doing so in the years past. It is easy to get caught in this trap...it never feels like quite the right time, the market may fall a bit, I may be over paying if I buy today etc.
Here are some of the studio apartments available today including those that are under offer which will help you to identify the right price point.
If you want to talk through your plans to buy or just want some general advice I am always happy to help without any obligation firstname.lastname@example.org
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