It’s that time of year again when we all return from our summer holidays, children go back to school and we start to think about Christmas..
This is usually a good time of year to attract buyers who want to be settled before Christmas and we are seeing very strong interest from both purchasers and investors.
Since the start of the year we have seen a large increase in investment sales and the attraction has been low interest rates and sustained tenant demand.
Andrew Granger & Co has never seen stronger demand from tenants so it appears to be a good time to invest in residential property.
From the tenants’ point of view, numerous factors mean that they will still choose to rent rather than buy and raising the required deposit, job insecurity, short-term contracts, etc are some of the reasons why tenants continue renting.
Low savings rates also prolong the period of time it takes to save for a deposit.
Currently the average handout from parents to assist their offspring in getting on the property ladder is £17,000 and this is the reason some parents are looking at investment property when the children are young, so they can start investing for the time when they leave home and can take advantage of any asset appreciation to start them off on the property ladder.
Indications are that interest rates will remain steady for the foreseeable future along with predictions that the East Midlands will see increases in the average house prices due to good road and rail links, etc.
Recently we are seeing more interest from people moving north to take advantage of living in a thriving market town where a train journey to London is just under an hour and house prices are considerably less than locations closer to the capital.
Potential landlords are often choosing to purchase property as part of their pension planning and are looking for yields on their investment at around five per cent gross.
The Help To Buy scheme for new-build properties has been part of the reason for increased market confidence, where the Government allows you to buy a new-build home worth up to £600,000 with a five per cent deposit and a 20 per cent equity loan.
This means that you have a 25 per cent deposit allowing you to access better mortgage rates.
The catch is that you repay the loan by handing over 20 per cent of the value of your home when you sell.
In January 2014, the second stage of the Help To Buy scheme will be introduced and basically this is a £130 billion mortgage guarantee scheme which could see the market flooded with 500,000 cheap loans for those with as little as a five per cent deposit on any property worth up to £600,000.
Unlike the first part of the scheme, you do not need an equity loan.
It is predicted that this scheme could allow house prices to increase steadily which should encourage investors to put their money into property.
Andrew Granger & Co will be hosting a free road show on buy-to-let property investment tomorrow (Saturday, September 14).
See here for the Mail’s story on the roadshow: Experts will be on hand at buy-to-let roadshow.
It is taking place at The Waterfront restaurant at Union Wharf canal basin, Market Harborough, between 10am and 2 pm, where a group of Harborough businesses will be providing a range of expert advice.
There will be financial advice from local chartered accountants E T Peirson & Sons, mortgage advice from the Market Harborough Building Society, legal advice from Wartnaby Hefford Solicitors and Andrew Granger & Co will be there to offer properties for sale and advice for landlords.
Please come along and join us, we will put the coffee on!
Market Thoughts column by Jill Griffiths.
Jill is residential lettings partner at Andrew Granger & Co in Market Harborough. For more details about the firm, see its website www.andrewgranger.co.uk.