Buy-to-let investors are avoiding the purchase of new build properties
Although investors are becoming increasingly optimistic about the recovery of the buy-to-let property market, the demand for new built flats has fallen more than ever.
A property agent reported that only 12% of investors who are planning to increase their property portfolio within the next six months are planning to buy a newly built property compared to 26% in March.
During the boom a lot of apartment blocks were built almost identical to each other, meaning landlords had to compete directly on price in order to fill their property.
Bulk purchasers are able to undercut individual investors as developers are being forced to bulk sell at discounted rates. These landlords are able to offer lower rates to tenants as they paid less for the property in the first place. This pushes down rents throughout the new build market.
Investors have seen this happen more regularly over the last few years; and are now avoiding the new build market. This problem of the oversupply of new build properties is particularly serious in cities such as Manchester, Leeds and Nottingham.
When buying an old or new property, landlords are urged to take out a landlords insurance policy to protect themselves and their property. For more information on various cheap landlord insurance, visit Discount Landlords Insurance.