University towns are a safe bet for private landlords looking for a new investment opportunity and now is the best time to buy, advises no commission estate agent, I Am The Agent. The news comes as the Council of Mortgage Lenders (CML) reveals buy to let mortgage approvals increased by 32% in the first quarter of 2012, compared with the same period in the previous year.
Around 32,300 buy to let mortgages with a combined value of £3.7 billion were approved between January – March. The majority of mortgage approvals were based on a LTV of 75%, leaving property investors requiring a deposit of 25% to take ownership of a new private rental property. With buy to let mortgage approvals on the increase, private landlords are finding it easier than ever to add to their property portfolio.
Despite an easier time with the bank manager, fixed fee estate agency I Am The Agent is advising would-be investors to think carefully not only about the type of property under consideration but its location. Rebecca Peach, managing director said, “Although the growing market share for buy to let mortgages is nothing less than positive, the housing market and economy in general is still rather fragmented, particularly giving recent government confirmation that the UK is in the grip of a double-dip recession.
For those still a little wary of renting a private property or needing guaranteed rental yields, we strongly recommend landlords to consider a student property investment. Twin university cities like Manchester, Nottingham and Leicester offer excellent rental prospects with a larger influx of students effectively giving twice as many potential tenants.”
Earlier this year, I Am The Agent teamed up with FreshStart Living, an affordable homes developer with a number of student residencies on its books. The partnership means several affordable student properties are available via the I Am The Agent website, with options such as Ford Lane halls of residence an ideal option for first time buyers. Priced at £29.950 per unit, the rooms are fully furnished, include all bills, located close to Manchester city centre and are situated on the edge of the Salford campus. A development is a fully managed one, taking away the hassle of day-to-day landlord responsibilities while maximising rental prospects. The developers estimate a gross yield of 11.8%, a net yield of 7.9% and a yearly rental income of £3520. There is a 2 year rental guarantee equating to 8% net yield.
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