The Brits can’t stop
talking about property. The hot topic of discussion at the dinner parties
of Wothorpe, Barnack, Uffington and Great Casterton’s movers and shakers is the
subject of the Stamford property market, but in particular, buy-to-let (B2L).
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? 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 Stamford terraced house, would mean finding £50,852 for the
deposit (as the average Stamford terraced house is currently worth £203,409) 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, there are approximately 448 Stamford landlords owing in excess of £83 million in mortgages on those Stamford buy-to-let properties. An impressive amount when you consider Stamford only has 0.042% 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 the Metro Bank are currently offering a 5 year fixed B2L re-mortgage rate at 3.79% 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 Stamford property market without advice? We give bespoke detailed advice to our landlords to enable them to spot trends in the Stamford property market before others, enabling them to buy better properties at better prices.
For example, did you know that flats are selling for around 35% lower than 12 months ago in Stamford, yet detached properties are selling for 41% 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.
Information on the local property market and ability to process it is the strongest asset we can give you.
As Lois Horowitz, the famous author says, ”Not having the information you need when you need it leaves you wanting. Not knowing where to look for that information leaves you powerless. In a society where information is king, none of us can afford that”.
If you are also considering purchasing a property for Buy-to-Let purposes, then why not run the property details past me? I'd be happy to discuss it with you in confidence.
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