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New Landlords Love Sales Slump

New Landlords love the sales slump
The latest slump in prices within the UK housing market, has turned out to to a happy hunting ground for Buy to Let landlords.

The RICS has just released news that new instructions to let property has increased significantly in the first quarter of this year. The combination of property owners experiencing difficulty in selling their properties, and the lower purchase prices, has created the perfect platform for property investors to re-join the market in order to capture the increased rental yields.

The RICS report that a rise in new landlords increased to 29%, compared to 2% in the previous quarter. It would seem that many new landlords are in fact Let-to-Buy homeowners who have decided to sit out the credit cruch cash crisis. They have taken advantage of the 700, or so, loan schemes available and have rented their own home out, so that they can make their new purchase elsewhere. Ironically, the Let to Buy landlord is, in fact, taking full advantage of the new lower property prices, by buying their new home now, and selling their existing home later when the property prices inevitably recover.
Reaping the benefits

The net balance of surveyors reporting a rise in gross yields is at the highest level in the survey’s history. Landlords are reaping the benefits of a collapse in demand in the housing market. 23 percent more Chartered Surveyors reported a rise in Gross yields up from 5 percent.

28 percent more Chartered Surveyors reported a rise than a fall in tenant lettings, up from 17 percent in the last quarter. Significantly, demand for both family homes and flats increased as many would-be buyers found themselves unable to step onto the property ladder.

“Rising yields may have stopped the recent retreat of landlords from the market. The percentage of landlords selling their properties when tenant leases expire fell from 4.6% to 4.2%.

Surveyors report that rents are still rising and rental expectations remain at more than double the survey’s long run average. Key areas enjoying rental growth are the South East and South West while London is the weakest area for rental growth.

For more information on Buy to Let, or Let to Buy, mortgage, call Vikkii on 01480 433933.

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