Richard Tugwell

Portfolio landlords looking north for higher rental yields

This week it was interesting to read the latest data regarding the UK’s best buy-to-let yield postcodes.

It revealed Liverpool, Manchester, Middleborough, Newcastle and Edinburgh as the top performers.

London fared particularly badly in the analysis of more than 580,000 rental properties, with areas north of the river delivering rental yields of just 1.5%, according to the analysis by credit checker website TotallyMoney.

This is the latest study to suggest a wider trend has been developing over the past few years with savvy landlords looking outside of the capital and heading north to achieve a better return on their investments.

At Together, we worked with packager Crystal Specialist Finance recently to provide a £879,000 loan for the directors of an investment company to grow their well-established portfolio of more than 250 properties across the North of England, delivering funding against part of their buy-to-let empire in just seven days.

We did this by delivering a second charge loan over 26 of their rental homes, worth £3.5m, and owned by the high-net-worth customers who run their property portfolio through a limited company structure.

The three investors – two of whom are self-employed directors of the property business – wanted to keep their favourable interest rate on the current first charge buy-to-let mortgages on the portfolio of properties, which they bought before the financial crisis of 2008.

However, the customers wanted to unlock the equity they had built up over the past decade through a second charge loan, and wanted the deal to complete quickly so they could press ahead with adding to their northern property portfolio.

They approached Crystal who brought the case to Together, having previously worked closely with us, and knowing our reputation for delivering fast finance tailored to customers’ borrowing needs.

We liaised closely with our trusted experts from legal firm Priority Law and the customers’ solicitors and provided the second charge loan, agreeing repayments on an interest-only basis.

As Jo Breeden, managing director at Crystal Specialist Finance, says, this case shows that professional and experienced landlords and investors are focusing on growing their portfolios, despite the tax and regulatory challenges of recent years. 

He added: “It was fantastic that Together pulled out all the stops to deliver in seven days, allowing the customers to move quickly with their plans to purchase more buy-to-let properties.”

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