The Brits can’t stop talking about property. The hot
topic of discussion at the posh dinner parties of Lionthorn, Majors Loan and
Larbert movers and shakers is the subject of the Falkirk Property market, but
in particular, buy to let. These people are buying up buy to let properties
quicker than an ace Monopoly player ...... or so it would seem if you read the
Sunday papers. So is the buy to let market a sure fire way to make money? Is it something everyone should be jumping
into? Is it a sure fire way to make money? Am I asking too many questions? The
answer is Yes and No to all those questions!
Firstly, a landlord only has to flick through Rightmove
or Zoopla, pick any property at random and agree a price. Then, find a modest
deposit of 25% (often by remortgaging their own home) which for an average Falkirk
terraced house, would mean finding £34,362 for the deposit (as the average Falkirk
terraced house is currently worth £137,450) and borrow the rest with a low
interest rate buy to let mortgage.
Finally, the landlord would rent out the property in a matter of hours
for top dollar and live happily ever after, with the rent then covering the
mortgage payments, with loads of money to spare and come retirement have a
portfolio of property that would have quadrupled in value in fifteen years.
Sounds wonderful – doesn’t it? Or does it?
Let us not forgot that the half of one per cent Bank of
England base rate is artificially low. The international money markets can be
fickle and if interest rates do rise quicker and higher than expected because
of some unforeseen global economic situation, that monthly profit will soon
turn into a loss as the mortgage will be more than the rent. Even though
tenants are staying longer in their rental property, tenants still come and go
and my guidance to landlords is they should allow for void periods, plus the
maintenance costs of a rental property and of course, agents fees ...... all
things that eat into that profit.
Interestingly, by my calculations Falkirk landlords owe
in excess of £358 million in mortgages on buy to let properties. An impressive amount when you consider Falkirk
only has 0.31% of all the rental properties in the Country. It really does come
down to a number of important factors going forward to ensure you are water
tight for the future. A lot of my existing landlords are fixing their mortgage
rates. One told me that HSBC are currently offering a 5 year fixed BTL
remortgage rate at 3.39% for 5 years (based on a 75% loan). I don’t give
financial advice, so you must speak with a qualified mortgage advisor...... but
that sounds very fair!
However, one thing I do know is that buy to let is a long
term investment, it’s a ten, fifteen, twenty year plan and property prices will
go down as well as up. You wouldn’t dream of investing in the stock market
without advice, so why invest in the Falkirk Property Market without advice? We
give bespoke detailed advice to our landlords to enable them to spot trends in
the Falkirk Property Market before others, enabling them to buy better
properties at better prices. For example, did you know that flats are selling
for around 1.96% lower than 12 months ago in Falkirk yet semis are selling for 1.39%
more (with every other type in between). This means we can advise on which
properties will go up in value better (or lose less if property prices drop),
we can also advise which have lower voids and which properties have higher
maintenance issues.
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