The second biggest sector is those landlords with property valued at over £201,000. The percentage of landlords with an average property value of up to £50,000 is down 6 per cent and those with an average property value of £50-75,000 are down 3 per cent.
Mark Alexander, Managing Director of The Money Centre, comments: “Our online landlord survey shows us the trends as they happen and allow us to stay on top of the market. The figures here show us that landlords are investing more money on property than before and that investments made before the property boom at the end of 2004 are now paying off and portfolios have increased in value.”
Buy-to-let landlords are now looking to borrow on average 52 per cent of the loan to value; this is 5 per cent up on the same survey taken in 2004. Alexander comments: “It makes sense that buy-to-let portfolio landlords are looking to borrow more loan to value than last year. The BOE base rate remains low, so it makes wise investment sense to borrow as much as is available, and make returns on the money borrowed rather than investing your own capital. Experienced buy-to-let landlords will know that it makes better investment sense to make money on other people’s money, and this is a fact that more investors have caught onto this year.”
Houses are still the most popular choice of property but with the property boom now over, experienced landlords are searching the market for the most profitable properties, and becoming more experimental in their choice. 3 per cent more landlords invested in a mixture of properties compared to last year. Professional people remain the most popular type of tenant, with 72 per cent of landlords preferring them living in their properties. However, landlords are not only experimenting with their property but also with their tenants and 19 per cent are now choosing to let their property to a mixture of tenants - a 5 per cent increase on last year.
Established buy-to-let landlords are optimistic about the rest of 2005, with the average landlord investing in a further two properties. Landlords also remain positive about property prices, with 77 per cent expecting prices to rise this year. Alexander comments: “Established landlords know that property prices on average double every 12 years, and will not be downtrodden by ‘property crash’ hype. The market is in the aftermath of the 2004 boom and is levelling out. Landlords know that the property market may be slowing but that buy-to-let investment is still a great way of securing personal finances for the long-term, our survey proves this.”
The three most important features for a landlord when considering a loan application remain interest rates, low or no redemption penalties and flexible products. The Money Centre says it continues to provide dedicated one-on-one guidance and access to exclusive mortgage products with their lenders to ensure that they get the best possible mortgage for their clients. Speed of application takes just ten working days to process. This exceeds the expectations of most landlords, who in the majority, at 35 per cent, expect applications to take on average four weeks.
Increasing amounts of landlords are choosing to seek a broker to arrange financing which is great news for mortgage providers. This is up to 9 per cent compared to last year. However, whilst they are putting the financing in the hands of the professionals, it seems landlords are less likely to hire a property management company with 72 per cent choosing to manage their properties themselves. Landlords are also maintaining ownership of finding their own tenants with 39 per cent choosing not to use a letting agent.
One of the most alarming statistics is that only 14 per cent of landlords surveyed belong to a Landlords Association. Alexander comments: “The figure for landlord association membership is actually down 2 per cent on our survey from last spring. I would urge landlords to join their regional Landlords Association. They are an invaluable source of advice, information and support and can help with all kinds of buy-to-let related problems. Joining means you become part of a larger group of investors, who can work together to resolve local property issues.”
