Buy-to-let investors are turning to complex deals to safeguard returns

The managing director of London-based Mortgages for Business said the ongoing shortage of housing in the UK meant more people were relying on rented accommodation but the rents were not rising in line with demand.

“With property prices rising and rental growth slowing, landlords may be feeling nervous about protecting their incomes,” said Mr Whittaker. “This is why more and more are turning to more complex deals with higher yields, in order to safeguard their returns and the security of their tenants’ homes.”

His comments came as the LSL Buy to Let index revealed that rents rose 1.5 per cent year on year, down from a 3.2 per cent rise 12 months ago. The average rent in England and Wales is now at £745 a month.

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Alan Lakey, partner of Hemel Hempstead-based IFA Highclere Financial Services, said: “We are seeing the classic bubble, with greater demand, rising property prices, gazumping and all in anticipation of a raft of rate rises that will likely push prices and demand below current levels.”