Buy-to-let investors active

THE buy-to-let bubble has not burst. But it has deflated, figures released this week reveal.

Although the bottom has not fallen out of the market, buy-to-let property is no longer the exciting get-rich scheme it used to be.

Two years ago, you could expect a property to earn back a tenth of its price in rent each year. Today, the average is 7.2%. But if the days when landlords could expect to earn a double-digit return from their investment are long gone, the good news is that the market is looking up.

After a long period of slow decline where rents have stagnated, property prices have rocketed and mortgages have become more expensive, the returns on buy-to-let properties are starting to rise again.

Lender Paragon Mortgages says rent yields have risen on average all over Britain for the past three months.

In the South, the increase has been from 6.42% in February to 6.95% in May, and things look even better up North, where the average has leapt from 8.67% to 8.93%.

This will be good news for the small army of buy-to-let investors who are still hoping this sector of the property market will make their fortune. They use our fast-rising house prices to help build mini property empires. They buy a property and then let it out and wait six months for its value to shoot up before remortgaging and using the cash released to put a deposit down on a second property — and so on.

This means that in four or five years, someone can go from having one property to owning ten or more.

One result of such an irresistible opportunity is that a growing number of women from all walks of life are joining the buy-to-let market.

'Female investors have leapt over the past two years. Today, 40% of our members are single women,' says Vince Gavin, managing director of London-based property club, Affinity.

It is one of the few property clubs to offer advice seminars aimed at women entering the buy-to-let market and, unlike most others, charges an annual £500 fee; some clubs charge thousands for each seminar 'session'.

'Some of the women in our club are buying up to 12 properties a year but, unlike the men, they are interested in achieving financial independence rather than just making money,' says Mr Gavin. 'This is particularly true of the single and divorced women.'

Angelique Noher, 33, has owned property since she was 21. She started out on the ladder when her grandmother died and left her home to Angelique and her sister. After buying out her sister, Angelique used the proceeds from this property as a springboard into a busy decade of investment.

Over the years she has bought six flats in Essex, a three-bed house in Lincoln, a similar property in Norfolk, a one-bed flat in Rotherhithe, Kent and a threebed house in Lanzarote.

Her biggest success is the first property she bought, the apartment in Rotherhithe, for £50,000 in 1992 — now worth £170,000.

Angelique is single and, surprisingly for a property magnate, lives at home with her mum.

'When I was younger and all my friends were out socialising, I stayed at home to save the pennies so I could finance my next property purchase,' she says.

'That‘s made it harder to find an ideal partner, but it‘s been a worthwhile sacrifice.'