The Leeds Buy to Let Property Market Update October 2021  

Buy to Let Sales Update

As expected, demand for properties in Leeds has started to slow following the end of the stamp duty holiday. This has compounded the customary winter demand slowdown expected at this time of the year and has meant that we have been able to agree 5 purchases on behalf of our clients in October.

However, this has not been without its challenges. Although demand has slowed, the supply of houses is quite low for this time of the year, and now the nights have started closing in, we don’t expect this to get better until January, when supply usually surges.

This shortage is making it difficult for new investors to secure properties, but fortunately we have some excellent agent relationships which are helping us in this endeavour.

This update would be incomplete if we did not comment on the recent interest rate speculation. There’s been talk in the news of the Bank of England increasing the base rate over the next year to curb the high levels of inflation. This would work if the inflation was Demand-pull, but it is actually Supply-push, i.e. caused by a shortage in supply for goods and services rather than a surge in demand. Nonetheless, we believe that we can expect to see some moderate rate increases through 2022.

Although this would usually put off home buyers, fuelling the speculation of a market crash, we don’t expect that to be the case, especially in the £100-200k price bracket that we buy in. This is because rates are currently at an all-time low of 0.1% and the Government still need to steer the UK ship out of the choppy waters that we find ourselves in.

Leeds Buy to Let Mortgage Update

Over the last month we have seen a slight increase in down valuations, with surveyors holding their line on the value of property. This is to be expected in a market where prices are increasing rapidly to ensure that the lenders’ risk profiles are balanced. Having navigated this territory during the Summer 2020 boom, we have a tried and tested system for dealing with these kinds of down valuations, so our clients always come out on top.

As mentioned in the Sales update, we see increasing interest rates on the horizon over the next few months, with further rate rises into 2022. We don’t expect mortgage rates to increase dramatically, but equally, we don’t expect them to fall any further either, so now is the best time to review your existing mortgages and make any applications for further borrowing.

With the rate increases upcoming, some people have started looking at longer-term fix option to provide security on their repayments. However, rates are still exceptionally low, with 2 year fixed rates from 1.14%, so you will be forgiven for being slow to react.

BTL Mortgage Update October 21 I Lifestyle Property People

Leeds Buy to Let Lettings Update

The Leeds rental market remains buoyant, but the low levels of stock mean that tenants are fighting for the best properties. This is fantastic news for landlords, with each property receiving multiple applications, allowing them to pick and choose the best tenants.

However, one of the challenges we’re facing, not helped by the ban on tenant fees, is that a number of tenants are applying for multiple properties in the hope that one of them gets accepted. With numerous applications, landlords are taking longer to select their preferred tenants, sometimes missing out on the best ones. The key to securing the best tenant at the moment is to be efficient and decisive in your selection process.

Another challenge for tenants currently is the lack of property owners willing to accept pets in their properties – especially since they can no longer charge an increased rent or hold a larger deposit to cover this risk. However, this does present an opportunity for landlords and agents that understand which pets are a problem and which aren’t. Landlords that consider pets could potentially secure better quality tenants, increasing their ROI.

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