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Rental yields "not covering mortgage repayments"
24/10/2007

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Rental yields "not covering mortgage repayments"

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Rent not covering the mortgageInvestors who are renting out properties are not getting enough yield to pay off their mortgages, according to the latest figures.

Property finance expert Heritable Bank says that 33 per cent of landlords are just getting enough each month to cover repayments while ten per cent are not getting enough.

The bank questioned 200 property investors, 43 per cent of whom claimed that price growth as the most important part of owning a house or flat.

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"The outlook for the property market is mixed, with price growth having slowed in most regions," said Adrian Scott, managing director of residential mortgages at Heritable Bank.

"This is an ideal time for professional mortgage advisers and expert lenders to help investors squeeze latent value out of poorly structured buy-to-let portfolios.

"Many will have built up piecemeal mortgage arrangements for each new property and not considered how they could restructure their overall portfolio financing far more cost-effectively."

Julian King of National Homebuyers has been assisting hundreds of would-be landlords with the quick sale of their rental properties. "Anyone who entered the property market in the last couple of years will be losing a serious amount of money over the coming year.

"Those with BTL mortgages may find things even more difficult as 'negative equity' become a phrase they hear far to much".

Mr King is a director of National Homebuyers, the UK's leading fast house sale company that guarantees to make an offer to purchase any property in any UK location, regardless of its condition or vendors need for a quick sale.

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