According to the broker and packager, Mortgages for Business, average buy to let yields have increased, quarter on quarter, with vanilla products now offering a yield of 5.8 per cent and complex deals offering up to 10 per cent.
Also rising quarter on quarter is the number of buy to let deals available, up 35 per cent, with over 400 deals now available compared to almost 300 in April. The demand from investors and an increase in lenders, from 19 to 22, has been a major contributor to the rise in available products. The current level of demand for rental properties is still outstripping supply and this has succeeded in driving average yield growth and has also pushed rents higher.
Professional investors are getting the best yields from complex buy to let deals with houses in multiple occupation (HMO) now offering average yields of 10 per cent, up from 9.3 per cent last quarter. Improved lending conditions in this sector are due to increased competition with new entrants such as KRBS and Whiteaway Laidlaw Bank. Paragon, TMW and Aldermore continue to support the sector.
Managing Director at Mortgages for Business, David Whittaker, commented:
“Languishing property prices and rising rents have created a perfect storm for professional investors and landlords. The yields on offer on investment properties are incredibly lucrative and with the owner-occupier market unlikely to change dramatically over the next eighteen months the returns for investors will be healthy for some time to come.”
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