UK Property Market May Recover Quicker
I have been considered optimistic for saying for a while that the bottom of the UK buy to let market is far sooner than many commentators are predicting and that we need to make the most of the next 3-6 months.
What have I been basing this on?
Simply how strong the rental yields now are alongside the strong local affordability. With saving rates at less than 1%, many large investors are cash buying to increase cashflow and make the most of the bargain prices.
First time buyers are chomping at the bit to buy as prices are very affordable based on their salaries.
With yields so high even the most conservative lenders are beginning to see the figures work in terms of debt servicability.
With base rate dropping to a new low yesterday of 1%, cashflow for buy to let investors as highlighted in the last newsletter is better than ever making it even more attractive.With borrowing in December 3 times higher than predicted by many economists and Halifax announcing yesterday that house prices were up in January by 1.9% there are early indications that the market is close to bottoming out.
The key here is to differentiate between the buy to let market, which I would put as properties under £120,000 that cashflow well and the owner occupier market with properties at say over £200,000. The buy to let market will bounce back just as soon as there are more mortgage products on the market because there is huge demand for property that gives a strong yield. Compared to almost all other investmenrt opportunities this oiffers excellent potential and long term security - if you can buy at excellent value today, cashflow your investment well at sensible leverage then will do very well in 5-10 years time.
The bargains right now are incredible, and as long as you can get a mortgage, you are able to pick up some terrific deals!
Experienced investors are buying as many as they can just now, and many new investors are entering the market as they can see the strong rental yields and the security of owning property far outweighing many other forms of investment.
So don't leave it too late - I am already concerned this golden opportunity is going to be over quicker than we would like...!
Article Courtesy of Alan Forsyth @ Property Investment Deals
www.property-investment-deals.com
