We can’t stop talking
about property. The hot topic of discussion at the dinner parties of Aylesbury’s movers and
shakers is the subject of the local property market, but in particular, buy to
let property. These investors are buying up buy to let properties quicker than
an ace Monopoly player. So is the buy to let market a sure fire way to make
money? Is it something everyone should
be jumping into? The answer is Yes and No!
Firstly, the government gives tax breaks to landlords, as it
allows the mortgage interest payments on a buy to let property to be tax
deductible. Also, 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 Aylesbury
terraced house, would mean finding £54,735 for the deposit (as the average Aylesbury
terraced house is currently worth £218,941) and borrow the rest with a low
interest rate interest only 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 1,407
Aylesbury landlords owing in excess of £263 million in mortgages on those Aylesbury
buy to let properties. An impressive
amount when you consider Aylesbury only has 0.132% of all the rental properties
in the country. It really does come down to a number of important factors 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 BTL remortgage rate at 3.79% (based on a 75% loan). I
don’t give financial advice, so you must speak with a qualified mortgage
advisor... but that sounds pretty good to me!
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 Aylesbury property market without advice? I
give bespoke detailed advice to landlords to enable them to spot trends in the Aylesbury
property market before others, enabling them to buy better properties at better
prices. I can advise on which properties will go up in value better (or lose
less if property prices drop), I 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 I 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”. One place to find information on the Aylesbury
Property Market is the Aylesbury
Property Blog, where you will find many articles just like this. Alternatively
you can stop by my office in Temple Street when you are next in town for an
informal chat without any obligation at all.
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