UK buy to let landlords abandoned by lenders

Lenders Finally Abandon UK Buy to Let Landlords

Banks are making it almost impossible for new entrants to the buy to let market to obtain a financially viable mortgage.

The credit crunch is hitting lenders hard and in response, they are hitting the buy to let landlord even harder. The number of mortgage products available has decreased by almost 75% since April 2007, and the decrease shows no sign of stopping there.

HBOS, who is the owner of a number of lenders including the Bank of Scotland and the Halifax, to name just two, has recently taken steps to effectively price itself out of the buy to let market. The other big lenders seem set to follow suite and "shut up shop," for all but the most risk free investments. They seem set to abandon the buy to let investor until the property market shows serious signs of turning around.

The rates that are being offered to UK buy to let landlords are becoming so unattractive that it is causing many to either seek a buyer for their portfolio or decide to hold and not consider buying any new property or refinancing their current portfolio until things get back to some form of stability.

Banks seem to have made a conscious decision to effectively price the novice or first time landlord totally out of the buy to let market. They are doing this by asking for larger deposits and changing rates to be so high that it makes it almost impossible for the first timer to see the value or profit in investing.

What are the options currently available to investors?

1. 
   Many investors are now looking more seriously at buying overseas properties
   


2. 
   Investors are holding onto their properties and not buying any more and not refinancing their current portfolio until the economic climate changes.
   


3. 
   Investors are turning their hand to developing in parts of London, Scotland and any other areas that are still maintaining some form of stability.
   


4. 
   Investors are putting their money into other potentially lucrative investments; in particular some are trying their luck at venture capitalism.
   


5. 
   Investors are having to travel further than their local community and really seek out the undervalued properties, that can still be found in certain parts of the UK. They are then getting themselves the best mortgage deal they can and sitting it out until the market turns around and they can refinance to a better rate and draw out some equity.
   

Is there any good news?

For the experienced UK buy to let landlord who has a surplus of cash, there are some great bargains to be had. There is less competition at the moment, which means that those investors that have the cash and the knowledge to weather this storm are in a very strong position.

Home owners that have to sell their home are finding it difficult to sell. Hence, the opportunity for investors to pick up many BMV properties that previously they where finding it difficult to get their hands on.

At the moment surveyors don't seem to have a grip on what the real current market value of property is and in certain situations this can open things up for the discerning investor to pick up a bargain.

Any property investor, including the first time investor, that is prepared to do double the work to find the bargain properties and then is prepared to live with perhaps a couple of years of a higher mortgage rates, in a few years time when they refinance, will potentially see huge gains.

The bottom line is that while many analysts are predicting doom and gloom, there are always those landlords that will thrive in adversity.

The question all investors, new or old, have to currently ask themselves, is do they see opportunity or just a black hole in the current buy to let market place. If it is a black hole, then they are destined to find life difficult over the coming months; however, if it is opportunity, then they maybe amongst the few investors that thrive and actually love this kind of uncertain property market.

Lenders do seem to be abandoning the large majority of UK buy to let landlords; yet, what they are also doing, perhaps unintentionally, is separating the men from the boys, the strong from the weak, the experienced from the novices and the low risk investors from the gamblers.

Don't waste your money chasing profitless property deals. Carlton Johnson is a well respected author and webmaster specialising in helping investors make money in any type of property market. To learn more and to claim your free book titled "The Five Rules of Property Success" visit the investment property website

How to Buy Investment Property - 5 Top Tips!

Are you interested in learning how to buy investment property successfully? This article will give you 5 top tips that will help you succeed and make money from your property investments.



Let's get stuck straight into these tips.



1. Do your research. If you are buying a property in the hope of becoming a landlord then make sure you have checked the areas rental potential and make sure the types of properties that you are planning on buying are the ones in demand by tenants. If you are planning on flipping the property, make sure you buy a property that is wanted by homebuyers.



2. Don't' blindly trust what anyone says. This includes so called experts. Talk to a few different property professionals to try and get a balanced view on things such as:



- What type of property to invest in



- What location



- What type of tenant to aim for



Sometimes it is only after canvassing lots of different opinions that you can really formulate you own strategy with confidence and with solid reasons why you plan to do what you plan to do.



3. Get for comparables for everything. Rental comparables, sales comparables - everything you can. Make sure your comparables are as much like for like as possible. For example: if you want to rent out a two bedroom flat next to a railway station, then try to get the rental comparison of other two bedroom flats next to the same railway station.



If you use a two bedroom flat that is ½ a mile away from the railway station, then your comparisons maybe way off. ½ a mile can be a long distance if it takes you from the desirable part of town to the rough drug dealing part.



4. Get your finances in place. This is a good thing to do even before you start looking for properties to buy. If your finances are sorted out before you start looking at how to buy investment property, then you will be more likely to be looking with confidence and purpose because you know if you find that bargain property you have the finances already in place to do the deal.



But if you don't have your finances in order there might be doubts in your mind about whether you can finance a deal even if you find it, this in turn may cause you to self sabotage any deal you see even before you put an offer in.



5. Employ the right professionals, whether that means builders, solicitors, contractors, or someone else, skimping on employing qualified people to do a job correctly can cost you a lot more money than you expect. Just because someone is cheap, doesn't mean they can do a good job and just because someone seems expensive doesn't mean that they can do a better job than someone who is cheaper.



The only way to find out for sure is to check references and their qualifications to do the job. Try and speak to real people, preferably face to face, that they have worked with before.



Hopefully by reading this article you now have a clearer understanding on how to buy investment property that will make you a long-term profit, as well as perhaps making you a quick buck now.

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Do you want to learn even more on how to buy investment property for profit? Are you interested in learning how to buy property with little or no money down? Then go to the Investment Property website for more free tips articles and advice. You can also sign up for the free Property investment newsletter