Saturday 1 October 2016

Buy-to-let investors returning to mortgage market

Published 24/03/2016 | 07:34

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Some Irish property investors that have previously bought with cash are now looking to invest using mortgage debt, according to a new report from property consultants, Savills.

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The report, titled 'Residential Ireland', shows the proportion of cash-financed investor purchases has fallen steadily over the last 15 months.

However, despite the increase of mortgage purchases, the majority of investment properties are still being bought outright.

In 2015, investors saw the biggest increase in mortgage drawdowns of 9pc.

Research director at Savills John McCartney said buy-to-let mortgages had become more difficult to get, causing investors to revert to cash-based investments.

"However, in the last 15 months we have begun to see investors leveraging the equity in their existing properties to expand their portfolios and drive returns by financing or refinancing with modest levels of mortgage debt.

"This indicates both investors’ appetite for gearing and banks’ increasing willingness to provide buy-to-let finance for borrowers who have modest overall loan-to-value ratios," Mr McCartney said.

Savills' residential director, Graham Murray, says the firm is now advising investors to target centrally located one-bed apartments "which tend to generate higher rents relative to the capital cost of acquisition".

The Savills director went on to say "with fewer people sharing there is less wear and tear".

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