Foxtons New Homes department connects landlords with our network of prominent developers to explore the best new opportunities coming to the London market. Today, let’s delve into what makes New Homes and buy to let the perfect match.
A tempting prospect for London renters
More and more, tenants welcome the idea of new build homes for the incredible range of benefits within the development and the chance to live in a brand new home. This is a good reason for buy to let landlords to to invest in property within new homes developments, because having an attractive offering means:
• A quicker let
• A premium rental price
• Longer-term tenancy
These new homes are built in the best locations with optimal transport links and excellent schools nearby. The homes constructed with modern methods, meaning low running costs with energy efficient systems that’ll save your tenants a fortune on their energy bills. It also means reliable minimal maintenance.
There are some developments, in fact, with units specifically designed for sharers, to make an especially attractive rental listing with a strong yield.
A plan for your portfolio
Buying off-plan means purchasing a rental property while the development is still being constructed. You also have a warranty which includes a two year guarantee covering your deposit while the builders work.
You’ve still got the developers’ marketing ahead, so you are poised to provide the area’s newest and most highly anticipated listing the moment it hits the market. Our team will help you acquire an attractive listing with all new interiors, appliances and amenities.
Read more about the benefits in our article: This might just be the best time to buy off-plan.
Easy, low maintenance letting
Buying a brand new property means everything is firsthand, well-built and under warranty. One of the premier benefits of new build homes for buy to let property is the long term reassurance with a 10-year structural warranty (such as a 10-year NHBC buildmark warranty). This sets high standards for the design, materials and workmanship of a new-build home and assures their structural integrity for a decade’s peace of mind.
As well, the new white goods, fixtures and fittings mean minimal maintenance. This simplifies the process of owning and letting a home immensely – a big reason why new build is popular with both first-time buyers and busy landlords.
What makes a strong buy to let investment?
One important indicator of a strong investment is a good rental yield – which means the annual rental income as a percentage of the property’s value. In London, rental yields are currently considered high when they reach 4-6%.
Another key factor is capital appreciation, also known as capital growth, which describes how much more valuable the buy to let property becomes over time. Capital appreciation is dependent on supply and demand, but also on quantum factors like an area’s regeneration efforts and infrastructure improvements.
Capital appreciation is the unknown element. Because it can be unpredictable, savvy investors put high stake in the data and analysis Foxtons and our developer network can provide. This, we believe, is one reason our Investor Events have really taken off this year.
There are many ways developers incentivise buy to let landlords. One we ought to mention here is a Rental Guarantee Scheme, which ensures rental yield every month, with some developers offering a guaranteed 6% yield.
Top tips for buy to let financing
Read: Advice for landlords on the buy to let mortgage market, from specialist advisors.
Alexander Hall is our partner mortgage broker firm. Besides their residential mortgage advisors, there is a specialist team, who are vastly experienced in supporting landlords in securing the most competitive and suitable financing for a buy to let mortgage. They have a network of strong relationships with the broadest range of lenders, access to exclusive mortgage interest rates and bespoke advice to help you achieve your buy to let investment goals.
Alexander Hall can help you with the best mortgage repayment options. They’ll delve into the details on the amount you can borrow and the mortgage term.
Opportunities abound to invest in London property
The sale in London of new homes is likely to continue to grow in the coming years, as the city remains a global hub for business and finance. A prospective buyer or buyers who are looking for a sound investment should consider buying a new build property in London.
Foxtons New Homes team work with top developers in the industry on their most exciting new projects across London, and we introduce them to our network of enterprising landlords through a busy schedule of Investor Events.
At these events, buy to let investors can come and see the development in person, discuss their plans with experts, and get the best information on changes in the London property market. Our landlords get a lot of value from the developers projections we can share, such as their predicted capital appreciation.
Landlords are also frequently offered early-bird incentives by the developers, like equity from completion extended payment terms, to encourage purchasing before the project is finished.
