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Investors Can Still Make a Profit
Many buy to let investors have become rich over the years from the high rents and yields residential property has commanded. Now the story may be changing with some struggling to find tenants and others unable to obtain the rents needed to cover mortgage repayments.
Those that rushed into buy new build flats are now finding with so many on the market that they are having to offer them at reduced rents to secure a tenant or finding that to sell them would give them negative equity.
Auction rooms are reporting that they are getting more buy to let properties through their doors and there has been an increase in repossessions.
Average rents peaked in February at a high of £11,886. People who want to get on the property ladder are now finding not only are they having affordability problems in buying a home but are now finding it difficult to afford even rental property in some areas.
It is generally expected that the next two years will be difficult and investors must do their homework before purchasing property. Landlords in the buy to let market for the long-term are now buying bargains at auctions.
Now is probably not the right time for new property investors to enter the market.
Last week there were 926 buy to let products on the market compared to 2736 last August. A larger mortgage over is now needed generally 125% but in some cases 133% is required.
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