Landlord Mortgages backsTMW’s withdrawal from new build market

Lee Grandin, managing director of Landlord Mortgages reacts to The Mortgage Works announcement that it will no longer accept applications for buy-to-let mortgages on newly build properties.

Grandin says:We applaud this decision by the Mortgage Works to withdraw from the new build market. New build properties are often sold on an off-plan basis whereby an investor purchases a property up to a year prior to it being built. This is a very high risk/high reward strategy that we feel can prove particularly dangerous in the current competitive market.

Investors who choose to purchase an off-plan property leave themselves vulnerable to factors such as low resale value due to oversupply, investor flooding and valuations which can be out by as much as 10%. We suggest that people are not tempted by the gifted deposits offered by these schemes and stick to basic buy-to-let principals such as only doing the deal when the figures stack.