Specialist mortgage broker says now is the perfect time to bag a buy-to-let bargain

Now is a great time to purchase a bargain buy-to-let investment, according to a specialist mortgage advisor.

Steve Olejnik, managing director of Mortgages for Business, says that due to house prices dropping during lockdown, the current climate is perfect for investors to bag a buy-to-let bargain, especially in London and the Home Counties.

The buy-to-let mortgage broker highlights two specific areas of property that are currently posing as great investment. One is ‘vanilla’ properties, the term that describes 2-3-bedroom houses and flats which tend to fall within the general lending criteria of mainstream buy-to-let lenders. In 2019, the average yield for a ‘vanilla’ property – essentially a 2-3 bedroom property – was 5.7%.

The second category of properties mapped out as being potentially attractive for investors during the current climate of lower house prices, are HMOs.  House in Multiple Occupation (HMOs) refer to residential properties comprising of communal areas that are shared by multiple tenants.

HMOs can make superb investments, often bringing higher rental yields than traditional buy-to-lets. Not only are yields often higher, but having multiple tenants in one property, the void periods of HMOs tend to be lower. In recent years, young professionals have been increasingly choosing HMOs as a place to live with fellow professionals. In 2019, the average yield for HMOs was 9.2%.

Steve Olejnik commented on the attractiveness of buy-to-let investments in the current climate.

We expect a temporary, short-term fall across London and the south east in the region of about 15 per cent. But there’s no question that if you invest in bricks and mortar now, with a bit of haggling during the process, you are going to see a lot of long-term capital growth.

“I think values will be back at February 2020 levels by the spring or summer of next year. Landlords who have not asked for a repayment holiday will be well set to snap-up some bargains with the help of lenders who have demonstrated a willingness to lend since the third or fourth week of the pandemic.”

Olejnik noted the particular appeal of HMOs, adding: “Yields from the various types of property remained pretty steady throughout 2019 and suggest property will offer a better return than many other investments in the future – especially to smart, professional landlords looking outside the box at HMO investments.”

Property auctions can be a great place to purchase buy-to-let investment, including ‘vanilla’ properties and HMOs. Check out the lots listed for our next auction in London where you might find your dream HMO investment.