Buy to Let opportunities are improving by Tim Trembath, Chairman, Mullucks Wells

This is due to a combination of factors not least the squeeze on values of mid to lower value properties over the last eight months. The website Zoopla reports an average drop in freehold values throughout the country of 11% knocking an average £26,000 off the value of a house. This reduction is not evenly spread and the North/South divide is one experienced commentators will remember from previous recessions and this has given the North East a drop of 14.12% since last July. As expected London in particular has been much more resilient and in the best areas there will have been little or no drop and in others a more modest drop of 7.5%.

In the Home Counties the residential market has been challenging and the price of more modest properties have dropped to a level where Buy to Let becomes a more realistic investment. Part of this story is the dearth of property to rent which has lead to a rise in rents and in some instances there have been several tenants vying for one property.

To complete the story a number of lenders have re-entered the market including Kensington, Precise and Paragon and more providers in the market should provide greater competition.

We are currently offering over a dozen properties on the open market between £125,000 and £250,000 where the expected rental values between £550 and £1,200 p.c.m. will give a return of between 4.7% and 5.7%. It is now sometime since such a return was available in this area to investors and in our view more clients will now consider returning to the market to take advantage of more sensible returns.