Property Articles

In the UK, everyday more and more novice landlords are tempted into the buy-to-let investment sector not only by a range of new and competitive products by the mortgage lenders but also by the success stories of the other property investors.The buy-to-let mortgages are now a lot easier to obtain and a lot more competitive compared to five or six years ago.

Although traditionally the lenders required a 130% rental to mortgage repayment ratio to secure a margin of safety during the vacant periods, some lenders are now allowing the predicted rental income to be 100% of the mortgage repayments. There are even products out there that require no indication of rental income.

The financial experts seem to be divided about these new products in the marketplace. Some experts argue that a lot of the novice landlords may be badly exposed by further interest rate rises that are widely forecasted for the rest of 2007 and potentially in 2008 too. According to this group of experts this situation is creating a lot of high risk investors that will be adversely affected by even marginal interest rate increases and this could potentially be the downfall of the buy-to-let investments in this country. Whereas the others argue that “when used properly by the experienced landlords”, these products do offer a lot of choice and flexibility, which can only strengthen the buy-to-let market.

Overall, it is down to the individual landlord to decide how much risk they wish to take but our advice to any novice landlords would be to seek independent financial advice from the experts before making any such decisions.Appleton Estates would be happy to put you in touch with Independent Financial Advisers should you wish to explore the buy-to-let property investments.