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Investors are increasingly searching for low cost high yield buy to let investment properties to ensure that their portfolios remain profitable.
According to a special report commissioned by The Mortgage Lender, buy to let investments will continue to offer attractive rates of return compared to other asset classes, but investors will increasingly need to be searching out cheaper and higher yielding properties.
The report, which looks at the macro and micro economic environment in the UK economy and housing market for buy to let investors, including buy to let mortgages and the impact of tax and regulatory changes, was authored by respected housing economist, Martin Ellis. It also looks at prospects and forecasts for the sector.
The report predicts that interest rates are set to rise by a quarter of a point in the next few months and that property price growth will have slowed from the current rate of 4-5 per cent to between 2-4 per cent a year by the end of 2018.
Interest rate rises however are expected to be gradual, with the financial markets expecting only three quarter percentage point rises over the next three years, so the impact on buy to let mortgages is expected to be modest.
Property price rises have slowed in the south and the report expects buy to let investors to increasingly be searching further north for higher yields on their investments.
Deputy chief executive at The Mortgage Lender, Peter Beaumont, said: ‘Our special report on the buy to let market looks at the macro and micro economic environment for buy to let investors and the factors that are likely to influence landlords’ investment choices over the coming years.’
Mr Beaumont continued: ‘It also highlights the need for a flexible and competitive buy to let mortgage market to facilitate continuing investment in a sector of the housing market that has grown in significance as home ownership has declined and demand for good quality residential property has increased.’
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