Mortgage News

Does Buy to Let still work in the South East??

In recent years the Buy to Let market has been booming, there are many professional landlords and there are a number of people who are using a portfolio of properties, which are let out as an alternative to a traditional pension scheme. There is a traditional school of thought that backs the old, adage of “money is safest in bricks and mortar.”

Consultants have recently seen a large number of enquiries where the figures just do not add up, with the rental cover that lenders require often being between 115 – 125% of the mortgage payment. Often the lenders are unable to lend, due to rent being too low for the mortgage required. Not all lenders work on the same basis, there are a new breed of lenders who are aware that not everyone who enters the buy to let market are doing so for short term gain.

There are a number of lenders who will take into account the individual they are dealing with, not just the property and the rental income. As with every scenario, there is a flip side, there may be a shortfall on a monthly basis, ie the rent may not fully cover the mortgage payment, and on a repayment basis, the figures have not worked out for some time, the interest only mortgage has reached a similar situation on high loan to value requirements.

Does Buy to Let still work in the south east? Yes is the easy answer, but not as easily as it did two years ago, there is now a need for individual income to assist the shortfall and a higher level of deposit. As always, this should not be viewed as a short term, get rich quick scheme, it is a long term investment and will pay dividends in the end.