Buy-to-let landlords are increasingly searching for lower-priced properties in a bid to secure higher yields, new research suggests.
Seven in 10 landlords are now searching for a mortgage on properties valued below £250,000, up sharply from just five out of 10 one year earlier.
And one in three are looking for mortgages on properties costing less than £150,000, according to the latest Mortgage Search Tracker from Mortgage Advice Bureau.
More landlords are opting for higher loan-to-value (LTV) mortgages as interest rates continue to fall.
The trend towards looking for cheaper investment properties comes as average UK house prices continue to rise, up by 5.2% in the past year.
London, the South East, South West and East of England all have average prices of more than £250,000.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “As rental demand remains strong nationwide, opting for a cheaper property can result in more attractive yields.
“It appears many landlords are looking to invest in areas outside the South of England, where property prices won’t hold them back from making a profit.”
Murphy said buy-to-let investors are benefiting from competitive pricing. "Although higher LTVs generally mean more costly monthly repayments, falling rates mean landlords may find they can now afford higher-LTV products.”