The property market in the UK has seen the introduction of a number of different government initiative more in recent times the help to buy scheme and more recently the Mortgage Market Review. It is interesting to review how these have impacted the property market and what if any affect does this have on the property investor.
The introduction of help to buy, kick started the property market and saw the property investor competing with the first time buyer for many one bedroom apartments or houses. The scheme freed a number of people held back by the lack of enough deposit and has now been extended by the Chancellor George Osborne the first part of Help to Buy will now end in 2020, in England instead of 2016. However, has the scheme been a victim of its own success pushing prices out of the reach of the first time buyers it was designed to help.
We have also seen Mortgage Market Review curtail the hopes of many with their new rules and this has dominated the property market in 2014. These rules have led to many being unable to get a mortgage as they do not meet the new criteria for obtaining a mortgage . These mortgage rules however apply to residential mortgages and do not affect the property investor. They have however, cooled the mortgage market and lead to a slowing in the increase of UK property prices.
So what do these changes mean for the property investor?
The rental market has remained strong with in most areas a under-supply, UK rents have increased and so the property investor is looking at a strong and sustainable market. There are some areas that have extreme shortages and this has been heightened in some cases by the 30,000 additional student places this year as the first part of the new government policy is implemented. Office of national statistics latest report indicates Net immigration to the UK is also increasing at 243,000 in 2013-14, a rise of 38% creating further demand for the rental market in the UK.
Research is the key to finding the right opportunity for the property investor. Location, Location, location is a good start but other points are also important to consider. Current and future demand generators will help in determining rental levels and occupancy and the target audience of tenants. Planning policy and planning applications submitted for the area are also important as these can have a positive or negative effect on the how easily the property will be let. Kerb appeal is also something for the property investor to consider with many properties being selected from website listings the more attractive properties are often more popular and selected first and therefore can achieve higher rents.
In looking at the financials the savvy property investor should investigate any block or estate charges if applicable as well as the costs of renting and managing the property. Investment property consults have considerable experience in assisting property investors in their selection of the right buy to let property to maximise yields and return on investment.