Mortgages Uncovered

It would seem that some of the more wealthy investors are now seeking to profit from the headache that is the buy-to-let housing market as recent figures revealed by CML showed that arrears amongst landlords had sharply risen during the past 3 months.

“The payment profile of buy-to-let lending has worsened more rapidly than the market as a whole. Reasons include falling rents and an over-supply of rental property in some areas,” it said. Investors are seeking to profit from distressed landlords by picking up properties at rock-bottom prices. Here we look at some ways to get back into the market.

Launched at the start of 2008 by Managing Partners Limited (MPL), The British Opportunities Fund is also backed by Halifax Bank of Scotland and has already paid between £89K- £100K for each property. Properties that two years ago were selling for £180K – £205K.

After stating it had already returned over 6% growth since the beginning of the year, the fund has now bought fifteen of forty eight properties in Fort Cumberland Street and at this moment in time still has pending offers on another ten homes on the street.

Management forecast a 10% minimum rental yield on each property; it has also now funded “non-structural refurbishments” installing a caretaker to maintain the street so it may charge high rental costs. Minimum investment is set at £50K – £2.5K if funded through a self invested pension.
Jeremy Leach, managing director of MPL, said:

“The fund has been able to purchase these properties from landlords who have overstretched themselves at prices that are as much as 40% below market value.”