Buy to Let Investors Choose High-Yield Properties

Recent research performed by London-based estate and letting agent Ludlow Thompson showed that the number of London property investors claiming to have yields of 7% or more declined by almost one quarter (24%) in the past 3 months.  The Ludlow Thompson research was performed among 600 buy to let investors, based in London, and showed that only 16% of buy to let residential properties, which were put for sale in the 2nd quarter of 2009, offered yields of 7% and more. The figure is 5% down from that in the 1st quarter (21%).
According to Ludlow Thompson director, the decreasing number of high-yield properties does not mean that there is no way of making a good investment. He says that experienced buy to let investors, who know how to carefully research the property market, manage to quickly pick up the best deals by making cash deposits. In his opinion, very few properties were offering yields of 7% and more during the boom years of buy to let. The economic downturn and the crisis in the UK property sector resulted in lower property prices, which brought about much more competitive yields that attract investors who no longer think that savings accounts, offering extremely low rates, are a good investment option.
He also added that investors with a good credit history can now easily secure a buy to let mortgage with an interest rate as low as 3.2%, which means that they will get a substantial and regular income on their investment. The Ludlow Thomson research showed that an average yield for London buy to let residential properties constituted 5.8% in the 2nd quarter of 2009, down from 6.2% in the 1st quarter. These figures are coupled with stable demand for rented properties in London because the supply is still low and the demand is high, unlike in other parts of the UK.