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'My 20pc per year buy-to-let returns: here's how it works'


Ryan Windsor in street in East Anglia 
Ryan Windsor, 27, who has a dozen properties and is buying three others Credit: David Rose for The Telegraph

Despite having had to pay higher stamp duty from April, buy-to-let investors still claim to be capturing ultra-high yields – including some of more than 20pc.

Proponents of buy-to-let claim this week’s interest cut will help the sector by reducing mortgage rates and driving more income-seeking capital into housing.

Returns for those taking a hands-on approach appear high.

Property entrepreneur Ryan Windsor, who has featured in Telegraph Money previously, is in the process of buying for £120,000 a modern, four-bedroom home in Thetford, Norfolk.

It is in disrepair and will need around £20,000 spent on it, he said, which would also include remodelling the property to increase the number of bedrooms.


The existing living room will be turned into a bedroom and the internal garage into a sitting room.

There will eventually be two bathrooms and three toilets.

The property has a “house in multiple occupation” or HMO licence for six. The rooms, depending on size, will be let at between £75 and £150 per week.

A couple might use the £150 room, said Mr Windsor. If fully let, his annual rental income would be £28,600, giving a yield on the £140,000 outlay of more than 20pc.

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Your capital is at risk so you may get back less than you originally invested. The value of any investments and the income from them may fall as well as rise.

He is borrowing £90,000. Mr Windsor, who is aged 27, owns 12 properties already and is buying three others, of which this is one. Most of his tenants are factory workers or skilled labourers.

They typically sign six-month tenancies and the rent includes bills.

Like many committed landlords, Mr Windsor is known to the local council and works with it.  He is, like landlords in other regions, open to the idea of handing over several properties to the council on a five-year contract with rent agreed at, say, 65pc of market rate. 

“That way I get certainty of occupancy and the council solves its housing needs,” he said. “I am fundamentally cautious and look continually for ways to reduce risk.”

He says he and his accountant have worked hard to stress-test his portfolio to ensure it will comfortably deliver positive returns through the coming years of higher taxation.

David Whittaker of Mortgages for Business, a specialist landlord broker, said: “Returns on savings will weaken, as they will on bonds and shares.

"Lower yields will be exacerbated by new monetary stimulus. The property market’s fundamentals remain strong given the imbalance between supply and demand.”

HMO buying-to-let has in recent years become increasingly attractive to investors, as yields are typically far higher.

Tenant turnover is also high, however, and most landlords say this is a labour-intensive form of investing.

For fee-free advice on your next move, Telegraph Mortgage Advice’s experts can provide guidance on your next mortgage. Call today on 0800 073 2322

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