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07Nov

The short answer to this is no, yes or maybe. For some investors the buy-to-let market has proved very lucrative and successful and will fund a very comfortable retirement and lifestyle. For others it has provided stratospheric wealth well beyond their initial expectations. However, for some unlucky individuals it has been one of the worst experiences of their lives and a costly mistake.

 

The lettings market at the moment has never been in such a state of flux. Legislation affecting landlords appears to change on a daily basis and adherence to these changes can be critical to their continued prosperity. Falling foul of these sometimes minor technicalities can at the least stop an eviction and at the worst result in a severe financial penalty. There have been significant changes to tax law in regard to the buy-to-let market and in 2019 the tenant fees ban will come into force, which will forbid agents from charging tenants referencing or other fees. We’ll skip over the rights or wrongs of all sides of this particular argument, what will definitely happen over time is that landlord fees will rise, so will rents and numbers of unscrupulous and fraudulent tenants will also rise for the unwary.

 

Looking forward buy-to-let still looks a good bet for many people. I would suggest that the one buy-to let property as a retirement vehicle may not be the best strategy, although this was always the most fragile investment vehicle as one bad tenant or agent could ruin it. For the professional investor adding to their portfolio then action can be taken to mitigate the changes and business will continue as usual. The investor with plans to build a portfolio from scratch could really seize the moment though. 

 

Many accidental and single or small portfolio landlords are selling and realising the asset, leaving an opportunity to purchase a competitively priced property, in good condition with a tenant in situ. This is a great basis upon which to realise instant capital value and monthly income. There are now a great number of buy-to-let deals available and even an increasing number of buy-to-let mortgages available for limited companies should you wish to take advantage of the tax breaks that a limited company vehicle may offer.

 

More than ever a good letting agent will prove their worth over the next few years in helping to source and build a profitable portfolio and protect the landlord from making potentially life changing errors. Our letting team are always available to discuss the current market and how we can help and we’re quite willing to spend time with those looking to embark on building a portfolio but just want questions answered. For those questions that we can’t answer then we’ll always be able to point you in the direction of people who can, from accountants to specialist solicitors and wealth advisors.

08Oct

The most common question an estate agent is asked is ‘what’s the market like?’. If you read everything that’s in the news at the moment regarding the UK housing market then there’s a good chance that you’ll fear that no one will ever sell a house again and that it’s all Brexit’s fault.

 

Whilst we can’t comment on the whole country and wouldn’t presume to contradict our esteemed economists, after all, they’ve never been wrong before (ahem), it does seem that everyone has very short memories and have forgotten that a correction in house prices is a pretty regular occurrence and that a raging housing market for too long is rarely a good thing. So, let’s get some facts straight about the local market. Houses are still selling, it’s just taking a little longer and prices aren’t rapidly rising, although still higher than twelve months ago. In addition there are fewer buyers around as the buy-to-let market and overseas buyer numbers have diminished. Neither of these are necessarily a bad thing.

 

Finally, a first-time buyer has time to look at a property a couple of times and make a considered purchase without competing with another forty people and without mild indecision costing them thousands of pounds. This hasn’t been the case for many years now. If I were a first-time buyer then this is exactly the type of market in which I would look to buy. As for sellers looking to move for reasons other than profit, genuine reasons like having a baby, down-sizing, job moves, wanting a house with a garage, needing a bit more space, needing an annexe for a relative, essentially all the reasons that we really need to move house, this is exactly the sort of market to move in. By the time you’ve agreed a sale the housing market hasn’t moved on so fast that it’s no longer feasible to move. You’re not finding it impossible to secure a property to buy because of too much competition and the process does not have to be conducted at quite such a breakneck pace lowering the potential stress levels.

 

Let’s also look at the other positives to a calmer property market. Interest rates are still low and don’t look to be increasing hugely any time soon. This allows savvy buyers the opportunity to make overpayments on their mortgage and become mortgage free sooner in life. Property prices always rise over time as there still isn’t enough property being built to fulfil long term demand, with property values in some areas, fifty percent higher than ten years ago, coincidentally the last time the market suffered a correction. If you’re upsizing then you don’t want rapidly rising house prices, as the gap in monetary terms between your purchase price and sale price is forever getting greater. In fact, if this is your situation, you might actually be better off long term if house prices were to stay level for some time.

 

Obviously, this type of market doesn’t suit everybody but there are many advantages to it if you’re willing look beyond the headlines. Moving house is a complicated process and we feel it’s important to look at the bigger picture about your personal circumstances and not only what your house is worth.


03Nov

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03 Nov 2017