As reported on This is Money on 19 Nov, the Leeds Building Society are now offering 2yr and 5yr fixed rate mortgages at 2.49% and 3.19% respectively.
This offer is available for up to 50% LTV. Is this any good for BTL Landlords and investors?
Let’s say you have £150,000 to invest. At 50% LTV, we have £300,000 to spend. Options available in RG14 offered on Rightmove as at 28 Nov 14 include flats at the Racecourse development, along with 3 or 4 bed semi detached and terraced houses. We’ll consider the Racecourse for this example due to the warranty offered by DWH for 5 years.
Rental income can be confidently predicted as around £1200 pcm.
With the interest only repayments of £311.23 (2 yr fixed rate) or £398.72 (5 yr fixed) we’re looking at rental income of approx £10,668 pa. or £9,615 pa.
This would indicate a return on capital of 7.1% or 6.4%.
In this example we have not included stamp duty, fees, service charges and so on, which ought to be discussed with a suitably qualified and authorised professional prior to an investment.
To discuss the example given, or for advice on the most suitable properties for rental, please give us a call on 01635 888 288.
