Rising rents and larger choice of mortgages for landlords

2014 is shaping up to be a bumper year for UK landlords.

Mortgages for Business have proclaimed a 'buying spree' among buy-to-let investors and whilst that statement is possibly a little over-enthusiastic, there is no denying that the number of buy-to-let mortgages has increased significantly over the past three months as has the activity across the market in general.

Whilst remortgage deals are still outperforming new purchases, the gap between them is closing fast. Loan-to-value has remained stable across most BTL mortgage products.

Looking at yields, the picture across the UK is similar to that in Edinburgh. HMO properties, which are very popular with affluent Edinburgh students, are outperforming other types of BTL investments.

Much of the activity in the property market has been fuelled by a larger number of properties becoming available. In turn, a wider choice of mortgage products has allowed more buyers to enter the market and is slowly starting to lead to higher property prices. These increases have grown organically and are not (yet) cause for concern.

For any landlord, rents will be a major concern. Research by an England-based lettings agent show increases in agreed rentals and rent charged throughout 2013, leading to the conclusion that a stronger sales market is not necessarily detrimental for private lettings.

This particular research found a rise of 8% in monthly rents. Looking at Edinburgh, rents have increased steadily, especially for sought-after properties. However, as tenants have a lot of choice, future increases are likely to be somewhat smaller.