BTL Investors are Poised as Property Prices Start to Fall The news few of us were expecting, until the EU referendum result at least, is that house prices are starting to fall. This will come as music to the ears of prospective buy-to-let property investors, who could see the stamp duty surcharge on second homes wiped out by falling prices.
“If you’re thinking of making a buy-to-let property investment, now looks to be the perfect time to invest”
Timing plays an extremely important part of the process when making a buy-to-let investment. Over the last few years property prices and rental costs have been heading only one way, and that’s up. But now, while the cost of renting across the UK is still on the rise, property prices are starting to fall. The result is potentially the perfect climate for buy-to-let investors. The power is in your hands When it comes to making a property investment, as well as keeping one eye on property prices, it is also well worth doing your research to find out what other potential buyers are thinking. During quieter periods in the market, the reduced number of buyers gives those who are prepared to part with their cash more bargaining power, particularly with sellers who are looking for a quick sale. This time of the year, November to January, is typically one period when buyer numbers are down, as people are generally more focused on making it through the Christmas period and staying warm. This reduced buyer activity can make it an excellent time for buyers to act. The Christmas lull Evidence of the traditional Christmas lull can be seen in the latest house price data from Rightmove. This shows that the asking price of properties that are new to the market has fallen by an average of 1.1 percent, equal to £3,452 over the last month. Although the price fall is less than the typical 1.8 percent reduction usually recorded at this time of year, the decline shows that it is currently very much a buyers’ market.
2 million more properties are needed in the short-term Rightmove’s housing market analyst, Miles Shipside, pointed out that there is still a severe shortage of homes. To solve this shortage, he says that around 2 million extra homes need to be built in the short-term, but he concedes that is not going to happen. Instead, he says the government must ensure the annual target of building 230,000 new homes is met, and this should include more affordable options. The significance of the shortage of affordable properties for prospective buy-to-let landlords is that rental demand is not going to fall anytime soon. In fact, rental prices are forecast to rise by 19 percent over the next five years, while house prices will rise by just 13 percent over the same period. So, for buy-to-let investors looking to expand their portfolios, early 2017 looks like an excellent time to buy! Act now If you’re thinking of making a buy-to-let property investment, now looks to be the perfect time to invest. House prices are falling, activity in the market is down and rental demand is up. For more information about the best buy-to-let opportunities in Camberley and the surrounding area, please get in touch with Martin & Co. Camberley today.
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