This is according to Mortgages for Business which has launched the MFB Complex Buy-to-Let Index. The Index tracks BTL loan size, property value, loan to value and yields and focuses on the previously unreported sub-sectors of the more complex buy to let mortgage transactions, specifically Houses in Multiple Occupation and multi-unit freehold blocks. Results will be published quarterly based on transactions carried out via Mortgages for Business in the previous three months.
The Index shows the average loan size for an HMO property was £287,800 with a loan to value of 61%. In contrast, the average loan size for multi-unit freehold blocks was higher, at £470,900 with a loan to value of 57%. The average yield was 5.7%, lower than for HMO properties but still a better return on investment than vanilla buy to let purchases.
Speaking about the new index, David Whittaker, managing director at Mortgages for Business said: “Client feedback throughout last year indicated that active professional landlords and residential property investors are keen to understand more about market dynamics and key trends. While they read journals and articles from the Council of Mortgage Lenders and other sources, they believe that the data is too general and historic by the time it is collated and analysed.”
