The Brits can’t stop talking about property. The hot topic of discussion at dinner
parties of Solihull’s movers and shakers
is the subject of the Solihull 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? The answer is ‘Yes’ and ‘No’ to all those questions!
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 1,569
Solihull landlords owing in excess of £293 million in mortgages on those Solihull
buy to let properties. An impressive
amount when you consider Solihull only has 0.147% 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 five year fixed BTL 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 Solihull Property Market without advice?
We give bespoke detailed advice to our landlords to enable them to spot trends
in the Solihull Property Market before others, enabling them to buy better
properties at better prices. For example, did you know that semi-detached houses
are selling for around 7% lower than 12 months ago in Solihull yet detached
properties are selling for 24% 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”. For further advice on the Solihull property market, please email me on jane.morcom@centrickproperty.co.uk
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