Many buy-to-let investors are holding back amid higher borrowing costs and growing regulation, but Avocado property co-founder and property entrepreneur Mike Robson says he is actively looking for opportunities to expand his portfolio and urges others to do the same.
Speaking on the opening episode of the relaunched Investors Corner podcast, following Avocado’s purchase by iad, he said: “It’s not a bad time to buy an investment if you’ve got some money. Have a look around.”
He said substantial differences between regional housing markets were creating opportunities for investors prepared to research unfamiliar locations and look at areas other investors may have abandoned.
He contrasted the relatively healthy market in his area of the Home Counties, where more than half of properties were sold subject to contract relative to available stock, with coastal locations where agents reported figures as low as 14% to 30%.
Within the podcast, he described his own recent experience of negotiating the purchase of a flat in Devon, which was being marketed at approximately £130,000 less than its previous owner had paid in 2021. Robson negotiated a further 9% reduction on the asking price, evidence, he said, of the negotiating opportunities available in markets where buyer demand had weakened. “I don’t know where the bottom is. Anybody that says they do is lying,” he said.
Robson, a previous co-host of Investors Corner, suggested that some coastal property markets were experiencing the consequences of the buying boom in 2021, with owners now facing the expiry of five-year fixed-rate mortgages agreed when interest rates were considerably lower.
He also identified potential opportunities in parts of the North East, where property prices remained relatively affordable but cautioned against assuming that the cheapest property represented the best investment, particularly when landlords are buying hundreds of miles from home.
Instead, he advised landlords expanding portfolios to consider the condition of a property, its location and the practicalities of managing it, rather than simply pursuing the highest apparent yield.
He said landlords should rethink their approach to buy-to-let in light of higher borrowing costs and changes to mortgage interest tax relief, instead thinking more carefully about their objectives, ownership structures and long-term financial plans. “Know why you’re doing it,” he said.
The interview marked the relaunch of The Investors Corner, hosted by iad UK lettings manager James Rawlinson and managing director Lee O’Brien.
The podcast is available here.
This article is taken from Landlord Today