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What an amazing time to be invested in buy-to-let property

Posted by Gary Winter on Fri, Jul 06, 2012 @ 04:33 AM
  
  
  
  

Here's 5 reasons why;

1. Interest rates remain at 0.5%

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This is keeping the cost of financing residential property investments down.

The mortgage variable rate is between 4.5% and 5.5% on most buy-to-let mortgages.

New buy-to-let mortgages can be found from as little as 2.94% at 65% loan to value and you can still find 85% buy-to-let mortgages.

2. The Bank of England confirms we are back in recession

Not a pleasant thought, however this is good news for buy-to-let investment, when considering the global affect it has on this business sector.

The more an economy remains unstable the less likely people are able to move on and progress with their own wealth. At the same time they become risk averse. So even if they are able to move on they stay living in one place for a longer time, prefering to rent as it's perceived as less risky.

So the global demand for rental properties increases and...

3. Rental yields increase on average by 0.4%

Channel 4 news reported that the average rent rose 0.4 per cent in May reaching £712 a month.

Rising rents = rising income. Very pleasant.

4. Inflation eases

When inflation eases, so do household bills. The normal trend when this happens is to see rent arrears dropping. Our offices are seeing this already.

5. Property values predicted to remain stable

According to Nationwide, house prices declined by 0.6% in June, taking the annual pace of house price growth down to -1.5%, the lowest reading since August 2009. The ending of the stamp duty holiday in March can partly be blamed. Overall though they expect the continuation of the pattern experienced over the past two years with prices remaining
fairly stable over the next twelve months.

Yes, it is bad news on the asset value front if you do not intend to invest in more property,
but it is good news to all of you that want to buy more and increase your property holdings!

Time to prosper, time to protect

Yes it could well be an amazingly good time to own buy-to-let property and it is, in my view, a very good time to invest. I do like balancing risk and reward though.

Chat with us about what we can do to help you increase your reward and balance the risk.

Local office contacts can be found by clicking here

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Comments

Valid comments, but surely anytime is a good time to invest in property? 
 
I say this, because, unless you are Dr Who, you cannot buy property in the past and you cannot buy property in the future. 
 
This time is "NOW" ... it's the only time we have to take action and try and improve our financial situation. 
 
Taking action in the "now" is the only way to achieve results, whatever your goals are. 
 
As long as you buy the right property in the right place for the right price with the right mortgage product, having found the tenant demand before you create the supply, then you should be okay. 
 
I wrote a post recently titled "Questions to ask yourself before becoming a Landlord" which is a nice follow on from this blog! :) 
 
http://www.propertytribes.com/showthread.php?pid=77380#
Posted @ Wednesday, July 18, 2012 6:19 AM by Vanessa Warwick
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