The Future's Bright(ish) for Buy-to-Let

For existing and would-be landlords, this year has seen some significant concern over the potential profitability of buy-to-let, with one overriding question tending to dominate the media conversation, and that is...

To invest, or not to invest?

As with most market overviews, context is all important, and especially because in spite of this sector’s affordability problems, there are still several instances where buying a property for investment, can and does make good financial sense.

The Good(ish) News

As it stands, the number of available buy-to-let mortgages has rebounded 7% in the last month. This brings the choice up from October’s low of 988, and back to the more promising levels seen in August 2022 (around 2400 products).

That said, potential investors are still stuck in a higher interest rate environment. One where at the start of the month (regardless of deposit), the average cost of a new two year BTL fixed rate mortgage stood at 5.95%. This is around 2% higher than two and five years ago, which is understandably making it somewhat more difficult for Landlords to achieve the kind of margins that they might have in the past.

On a more positive note, however, a selection of sub 4% offers are gradually creeping back in for existing landlords, with The Mortgage Works, for example, currently offering a 3.99 per cent fixed buy-to-let purchase deal for two years.

For investors looking to take advantage of these current improvements in the buy-to-let landscape, the stock of suitable properties has also received a welcome boost.

As an example, this first floor, one bedroom apartment, located in one of Maidenhead’s most sought-after developments, boasts signifcant buy-to-let potential for existing and prospective Landlords looking to tap into Maidenhead's recent 'commuter line' status.

Spacious and well appointed, it is located in the heart of Maidenhead town centre, within 0.4 Miles of the town's railway station (Paddington/ Elizabeth Line). The property boasts a spacious entrance hall, generously proportioned main reception room and Juliette balcony.

Summary

Quite understandably, there remain many challenges and concerns facing today’s landlords, ranging from the jump in mortgage costs, to the removal of Section 21 notices, tax challenges and last, but not least, the proposed changes to energy efficiency rules.

On the whole, however, despite higher borrowing costs looking much like the 'new norm', the unique market conditions of lower rental stock and higher demand, means that cash-buying Landlords, in particular, and those with access to the limited stock of specialist lending, might be well poised to find life in the property investment pool yet.

For more details on the featured property, or to register for information on properties with investment potential, please contact Braxton on 01628 674234.