The latest Complex Buy to Let Index by Mortgages for Business has found that the average property value for buy-to-let mortgages has fallen to £310,918 in Q2 2017 from £413,737 in Q4 2016.
This follows an overall trend in landlords opting for cheaper properties.
Steve Olejnik, COO of Mortgages for Business, said: “Landlords have been selective with their purchases this quarter, choosing properties that maximise their income with minimal investment.
- Paragon to implement PRA phase 2 changes
- Landbay to offer insurance service for landlords
- Limited companies borrow more than individual landlords
“This strategy is likely to remain common as it allows landlords to maintain profitability while HMRC phases in restrictions on income tax relief for landlords.”
Average rental yield has remained consistent, with yields in Q2 2017 (5.5%) declining just 0.2 percentage points from Q1 2017 and reaching the same level as Q4 2016.
Yields on semi-commercial properties increased by 0.8 percentage points in Q2 (8.7%), average yields for houses in multiple occupation fell by 0.6 percentage points in Q2 2017 (also 8.7%), while yields for multi-unit freehold blocks stood at 7.9% (up 0.1 percentage points).
The average number of products available in Q2 rose to 1,220 (Q1: 1,167), but this was still less than the corresponding figure for Q4 2016 (1,238).
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