BTL Interest Only - Recommended LTV

amnblog

Where is the risk?

Cintrapark

As I mentioned, I"m not a property investor - I merely rented my property out as I moved countries. I'm therefore not experienced in this sector and merely wanted to know peoples' opinion on my current setup. If there's no apparent 'risk' then great.

Thrugelmir

Cintrapark wrote: »

If there's no apparent 'risk' then great.

Letting a property is a business. As with any business venture there are numerous risks. Being aware of what they are and mitigating those that one is able. Should have formed part of the initial process.

Cintrapark

Thanks. I've done plenty of mitigating so I'm in a good situation.

buglawton

As an expat you've done well with 3.99% interest only. Elsewhere in MSE I've seen an expat asking how to get a UK mortgage never mind a decent rate.

Cintrapark

Hi Buglawton. I used IMP and they were absolutely fantastic. I think my product might no longer be available but hopefully lenders will start to enter the market again soon.

ViolaLass

Cintrapark wrote: »

Thanks. I've done plenty of mitigating so I'm in a good situation.

Two posts ago you weren't sure whether there was too much risk, now you're happy there isn't but I'm not sure what happened in between...

buglawton

As an accidental landlord, 2% (typical for London apparently) return on the asset value may be ok, but I'm not sure anyone would want raise a mortgage for this return.

getmore4less

£223k/0.59 = £378k

£1200pm rent gross yield 3.8% not very good.

net yield on just the finance is vulnerable to rate rises.

Leaving less for other costs.

As a letting business this is not making money for the capital invested.

Probably doing ok as a property speculation.


If you want to keep the place long term to live in, better start saving.

antrobus

getmore4less wrote: »

£223k/0.59 = £378k

£1200pm rent gross yield 3.8% not very good.....

But not untypical for today's market.

As an example, we just negotiated 9% off a two bedroom flat in Earls Court for a client that was on the market for £725,000. With a rental return of £500.00 per week, this produced a gross yield of 3.88%.

http://www.thelondonpropertyscout.co.uk/news/109-is-now-a-good-time-for-london-buy-to-let-investors#.VVmfd0ZKUig

Or see here;
http://www.londonpropertywatch.co.uk/average_rental_yield.html