Although analysts of the London property scene believe rents have reached their peak in central parts of the capital, evidence that investors are still looking to purchase property insurance on homes they intend to rent out is plentiful.
A report by Business Development Research Consultants, Continental (BDRC), shows that the number of landlords who own their properties outright is growing by 10% according to BDRC Director Mark Long. He emphasised the point when speaking at the industry sponsored Mortgage Event. A survey by BDRC found that almost 3 in 10 of those questioned said they had no mortgage on their portfolio including 1 in 10 of those with the largest stock.
Mr Long told delegates: “What we are seeing is a new or returning community of property investors, those making an active decision to take funds from another investment vehicle and put it in property. Nothing discriminates more in our survey than the size of your portfolio. Intermediary advice is much more important for the smaller, less experienced landlord whereas lending criteria assumes a much greater importance for the portfolio landlord when they are trying to source a product.”
The BDRC survey showed a remarkable preference by landlords who did have outstanding loans on their property empires to use an assortment of lenders. The report showed that the average lender used five different loan companies to facilitate an average eight buy-to-let loans. Interestingly enough a high proportion of landlords were unaware of the different lenders who they got funds from as they tended to use just one intermediary who they saw as their mortgage provider.