Buy-to-let portfolio landlords are finding differing rental yields from their properties are affecting their ability to invest in additional properties and hindering the expansion of their portfolio. Many investors with a buy-to-let portfolio are finding that while some properties generate high rental yields, others are lagging behind. In the past, this has limited investors in terms of their future investment options, as traditionally, each property has had to pay for itself. Investors will be pleased to hear that this no longer applies.
Mark Alexander, Managing Director of The Money Centre explains: "The buy-to let market continues to expand and change. Mortgage lenders have to adapt alongside the market to continue to offer investors the best financial vehicles available. Part of this is helping clients to expand their property portfolios. For example, buy-to-let mortgages have become more flexible over the past few years, and we see this new offer as a positive step for investors. It is important for us, as consultants, to keep on top of new mortgage products available and to make investors aware of new opportunities to aid their portfolio growth."
The Money Centre's latest offering helps landlords to release money from property with lower rental rates, within their portfolio, and works by using the total rental income from several properties. Through this financing, it becomes possible for portfolio landlords to support properties with lower rental rates with income from other properties in their portfolio.
Mark continues: "This simple idea opens up a whole range of possibilities for investors who are looking to increase their portfolio. It allows customers to borrow up to 85 per cent of the total portfolio value, a vast improvement on simply borrowing against one property. Following this, investors should seek guidance on the best place to re-invest the capital released, to make the wisest choice and maximise their returns. It is a common problem for buy-to-let investors to reach a certain point in their portfolio development where they feel 'stuck in a rut', due to equity becoming locked into properties with low rental incomes. This new financing changes all of that. We see it as a fantastic opportunity for buy-to-let investors and encourage investors to scour the market and obtain this new flexible mortgage at its most competitive available rate."
Another recent development in the buy-to-let market, with regards to rental incomes, is the recent Government task force charged with increasing the speed of electronic and telephonic transactions. This is sure to reduce fraught discussions between landlords and tenants on rent day. "The recent decisions about changes to electronic payment transfers have come as a result of the agreement between a Government task force and the banking industry," adds Mark. "Payments will be processed on the same or next day, removing the excuse for late payments via cash and cheques. However, these new measures will not come into effect for up to two years, but do represent a positive change in attitudes towards electronic payment. It is also a positive step for property investors, making the income from properties more readily available, removing the hassle of chasing up tenants for payment by cash or cheque, and generally helping to improve tenant/landlord relations."
Developments in the buy-to-let and property market as a whole make it a great time to invest in property. Be it your first buy-to-let purchase or an extension of an existing portfolio, The Money Centre can provide guidance on the best ways to make maximum returns on your investment. To take advantage of current market conditions, call The Money Centre to arrange a one-on-one consultation.
