The average value of BTL landlords’ portfolios increased by more than 6% in the first quarter of 2010, according to Paragon Mortgages.

Unsurprisingly, street-wise Landlords have been adding property to their portfolios during this good-hunting period including replacing existing stock with properties of a greater value.

The Paragon report also revealed that landlords expect the average value of their portfolios to increase further Q1/2011 over Q1/2010 (+1.2%).

John Heron, MD of Paragon mortgages, said, Confidence amongst the landlord community has grown in recent months and that is reflected in portfolio valuations. On the whole, house prices have been rising since the middle of last year and we know that landlords have taken advantage of a more fluid housing market to add properties to their portfolios. Looking forward, more landlords believe that portfolio values will rise than fall, but the vast majority are unclear about which way house prices will move. There are a number of variables that will influence house price movement, but access to mortgage finance for the market as a whole will be key.

 

What We say ~ Below Market Value acquisition is crucial to the landlord/investor adding property for their portfolio with substantial day-one equity. At the beginning of this year, we predicted an increase in typical net investment fees due to the falling availability of good BMV property and the increased costs incurred in finding suitable stock. Our average BMV total net *fees however, remains under £7,000 with some current listings even under £5,000. And, we only list property with rental yields of at least 6%, but averaging out about 8%, providing a robust buffer against rises in BTL mortgage interest rates. As demand for rental property must increase due to not enough rentable housing stock and the increasing numbers of frustrated, wannabe First-Time Buyer, any astute landlord/investor will be seeking more quality property acquisition, staying closely in touch with the natural uplift expected in market rents over the next year or so. 

See www.bmvpropertyinvestmentdeals.co.uk for latest property plus Blog-n-News about current market trends and issues.

*Inclusive of valuation, legal, finder and mortgage broker fees.

Leave a Comment