You are here: Home - Mortgages - Buy To Let - News -

HSBC: Quality counts when it comes to buy-to-let

0
Written by:
02/09/2014
Buy-to-let investors may need to get the paint-brush out, after new research showed that property in immaculate condition can command up to 75 per cent higher rents.

The average rental income for a two-bedroom property in immaculate condition is up to 75 per cent higher than for properties in poorer condition, according to HSBC.

Just 38 per cent of landlords are prepared to take on the challenge of a fixer-upper when expanding their buy-to-let property portfolio, despite the much higher costs associated with buying a property in perfect condition.

While an immacualte property costs an average of 43 per cent more, according to HSBC’s research, it will command an average £838 per month compared to a lesser property’s £498 per month.

On average properties requiring extensive refurbishment offer an average yield of 4.4 per cent, a full percentage point lower than the average yield on an immaculate property. Only in Liverpool and Edinburgh is it more beneficial to buy a fixer-upper.

Renovation could be a viable option; while a new kitchen, bathroom and redecoration of four rooms typically runs around £10,428 the work could add as much as £58,557 to the value of a property.

Peter Dockar, head of mortgages at HSBC, said: “Ready-to-move-into properties are often the savvier choice for landlords looking to purchase additional BTL properties. Not only does this avoid the need for lengthy and expensive renovations, it can also result in higher yields in most areas of the country. While the initial purchase price will be significantly higher, rental returns are also improved, making monthly mortgage and maintenance costs more palatable.

“The choice is clear for landlords hoping to make the most out of their investment: either purchase or renovate a property to good condition or risk lower rental income and reduced overall yields.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • RT @procopywriters: Self-employed workers lose an annual average of twenty days chasing unpaid invoices. As the growth of the #freelance la…
  • RT @procopywriters: Self-employed workers lose an annual average of twenty days chasing unpaid invoices. As the growth of the #freelance la…
  • Self-employed workers lose an annual average of twenty days chasing unpaid invoices. As the growth of the… https://t.co/uRgjaZXQ9z

Read previous post:
Help to Buy equity loan completions near 30,000

The government's Help to Buy equity loan scheme has helped just under 30,000 households purchase a property since it launched...

Close