Buy-Let Market low yields warning
Higher borrowing costs have caused a UK residential property group chairman to warn that buy-to-let investments may no longer yield sufficient returns to be a viable.
Andreas Panayiotou the chairman of the Ability Group (Property development company) said in an interview that long term investors would still make money but that many were just joining the market with little experience and because others told of high rewards.
Rising house prices and static rental prices has caused the yield to go to record lows and the return on investment will always be proportional to the value of the property.
Andreas also believes that house prices are currently overvalued by at least 20% and are of course affected by the Bank of England Interest Rate rises over the last year. So basically prices need to drop to bring returns above the cost of funds.