DIY approach essential if landlords want to safeguard yields

Latest figures released by the Council of Mortgage Lenders (CML) indicate that the payment profile of buy-to-let lending has worsened more rapidly than the market as a whole.

Keshav Thukaram, Managing Director of buy to let property investment portal Smartlandlord.co.uk, comments: "Buy to let landlords had access to mortgages that allowed high gearing (in many cases up to 90% LTV) and also attractive interest rates which perfectly suited the landlords as the capital appreciation from the rising property markets allowed them to bear voids and be lenient on rental expectations."

"The reduction in asset values due to falling property prices is putting pressure on landlords to ensure that their return on investment is covered predominantly from rental yields. Unless landlords have a DIY approach and the tools to manage their buy to let properties themselves, the high costs they incur in finding a tenant or manage their property eats away into their slim rental yields."

"Glut in property sale has resulted in more properties on the rental market resulting in decreasing rents and increasing voids."

"This is, however, just the general overall sentiment in buy to let at a national level. There are several pockets in the country where landlords are enjoying decent yields. These are generally landlords who are not geared heavily and do not incur expensive costs in letting or managing their properties. However, the ones that jumped on to the bandwagon of buy to let and geared up to 90% with fixed low interest mortgage rates that are coming up for renewals are the ones that are heavily impacted. Irresponsible investors or irresponsible lending - the debate will continue for some time."