Although the current credit crisis has hit landlords in all kinds of ways including increased mortgage rates and falling prices, they are still generally optimistic according to independent research carried out by The Money Centre.
Among the positives are higher rental yields. And although cash flow has been affected actually buying another investment property can help, according to the centre.
The fact that one in five landlords who took part in the survey said they expect to buy more properties within the next three months, speaks for itself, the research shows.
The centre took figures for a typical investment property and looked at how they have changed over the last year. A property bought for £140,000 would now be worth around £98,000, a drop of 30%. The deposit required to buy it would have been £21,000, now it is more likely to be £24,500, a rise of 25%. The mortgage a year ago would have been £119,000 compared with £73,500. The rent would probably be the same at £600 per month but the rental yield which was 5.1% would now be 7.3%.
'Buying an investment property now can not only help with the cash flow on other properties where mortgages may have risen but also good cash flow generally and good capital growth potential for the future,' said Lynsey Sweales Director of The Money Centre and herself a landlord.
'Landlords are in it for the long term. It is vital that landlords continue to buy property not just to expand their portfolio but to ensure tenants have properties to rent and to help the property transaction market,' she added.
