With Brexit not too far away, many people are considering whether Buy-To-Lets are still a good investment, especially when you take into account the interest rate rise, the fact that landlords are having to pay tax on their revenue, rather than their profit after mortgage costs and with the Bank of England cracking down on affordability, lending has become much tighter for property investors.
However, today’s uncertain market conditions offer canny buyers opportunities to find a property bargain. You could almost say that a housing cycle is underway since the last recession, where house prices were around 30% cheaper and in some areas more. According to Hometrack, Leicester has seen a price increase of 30% in the last ten years and in some areas such as Belgrave and Evington, house prices have risen more due to considerable demand.
Owner occupying properties are also dropping due to the strict lending criteria that banks are imposing buyers and with interest rates rises, deposit levels are having to be much higher to meet the affordability criteria. This doesn’t get easer for First-Time-Buyers either, meaning that it will take them much longer to save for a deposit and in some cases they will have to borrow from the bank of mum and dad. So demand for rental properties is increasing and should increase for the foreseeable future.
When you look at the bigger picture, the stricter lending criteria and rate rise, will affect both homeowners and property investors. However, for the serial property investor who is after a long term return, investing in property has become very attractive when you take all points into account. With some property bargains coming onto the market and with many more to come if we are to follow this property cycle, investors can be in for a treat.
At Seths we are proud to manage and guide property investors during these property cycles and have done so for the last 48 years of being in the business. Our expertise has seen many investors grow their portfolios over time and although the property market maybe uncertain in the months ahead, we are confident that over time, the property market will grow and house prices will continue to increase for those with a long term view in mind.
For all your property needs and investment advice, email me directly at email@example.com or call 0116 266 9977 for honest, expert and friendly advice.
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Please note that the above blog is our view on the property market and is not to be taken as investment advice.
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