
Deal Summary
- 2 Bedroom House + Conservatory
- Good Location Close to Town Centre
- £3198 per annum Cash-Flow Positive
The Figures
Market Value: £95,000
Purchase Price: £73,000
Discount: 23%
Instant Equity: £22,000
Yearly Cash-flow
Rent: £5700
Mortgage (BM 4.35%): £2382
Insurance: £120
Profit £3198
The Mortgage Works will tomorrow be launching a new set of products geared towards helping landlords finance deals that in modern times most mainstream buy-to-let lenders have shied away from. These include houses in multiple occupation (HMO) and a range of buy to let tracker mortgages which allow borrowers to switch on to a fixed rate at any time without incurring an early repayment penalty.
The new range being introduced tomorrow will also include buy-to-let mortgages for Limited Companies as well as changes to buy-to-let, let-to-buy and light refurbishment products. Some existing products will see rates improved by nearly 0.3%.
The Mortgage Works head of Products, Tracy Pearce commented,
‘The Mortgage Works is committed to considering the challenges that landlords face now and in the future and continually looks for ways to offer them greater choice and common sense alternatives. The HMO, Limited Company and Switch to Fix propositions are designed to give customers flexibility over their borrowing, which means giving them more control and more chance of finding the perfect product for their needs.’
Our experiences with the Mortgage Works have been very positive since the start of the credit crunch, which can rarely be said for many of the other lenders out there. Their application process is relatively simple and their behaviour is generally consistent across the board and over time. If this remains true with the introduction of these new products then this should open the door for many investors to prosper, in particular with the HMO products being introduced.
Landlord confidence grows in buy-to-let market
A majority (64%) of UK landlords feel more confident about the buy-to-let market as 2010 begins, according to the latest rental confidence index from Upad. The figure represents a 6% increase from the same survey in December. (Mortgage Solutions 13/1)
Landlords enjoy a much healthier 2009
Landlords enjoyed a 7.6% annual return on their investments by the end of December 2009, according to the latest index from LSL Property Services. The value of their properties rose 3% in the year while rental income added a further 4.6%. This means in 2009, a typical landlord made a return of £12,740. By contrast, in 2008, a typical landlord would have lost 8.8% or £15,100. Arrears performed very well in 2009. On average 11.7% of rent was unpaid by the date it was due, down from 14.5% in 2008.
(Mortgage Solutions 15/1)
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