Extra! Extra! Hot news from the property sector coming up!
The English Housing Survey, conducted by the Department for Communities and Local Government, confirmed that the number of homeowners in the UK have dropped, while the volume of renters steadily increased.
Newest data from the study said that 63 per cent of the 22.6million households in England were owner-occupied in 2013-2014, this is 2 per cent lower than the 65 per cent recorded during the 2012-2013 period.
Experts claim that this has been the lowest rate of homeownership in the UK for the past 29 years.
Some analysts say that stagnant wage rates and steady house price increases have dealt a big blow to young people’s capacity to buy a house of their own.
The high number of renters from the 25-34 year old demographic means more opportunity for property investors out there.
So how do property investors get the most out of this great investment opportunity? The answer is simple: get the best buy-to-let mortgages possible! To get the best mortgage deal out there you’ve got to do these 2 things:
Pick up the calculator
Math isn’t everyone’s favourite subject, but you’ve got to do a lot of computation before you enter property investment. Know how much you can really afford to pay for a property and then make a projection of how much you can ask for as rent in the property you are leasing.
This is very, very important, because buy-to-let lenders typically want and expect rent to cover 125% of the mortgage repayments, and buy to let mortgages often require higher buy-to-let deposit fees compared to the regular 25 per cent rate for residential mortgages.
Not only will you have to compute for the costs you’ll encounter when preparing to buy, you’ll also have to compute for any negative contingencies that may happen once you’ve acquired the property.
Stop for a second and ask yourself truthfully. Can you still pay for the monthly buy-to-let mortgage payments even when your rental property has been sitting empty for a couple of months? Or What if interest rates climb back again? Will you still be able to afford the mortgage then?
Shop around for the best mortgage deal
Property investment can be a lot like shopping. There are impulse shoppers who immediately pick up the prettiest item they see. Snagging the first mortgage that comes in your way can be very costly for you.
Instead, try following the example of the thriftiest shoppers who go from store to store to compare prices. Make sure you’re able to sift through all the available buy-to-let deals out there before you decide which one you’ll get.
Don’t make the mistake of walking to just one bank and then sign up for the cheapest buy-to-let mortgage they offer you. Knowledge is power and you have to be able to compare other terms available to you so you can make the best and most-informed decision.
Based on my experience, Skipton BS, BM Solutions, NatWest, Woolwich, Coventry BS, Platform (part of Co-op Bank) and Accord (part of Yorkshire BS) have consistently offered fair mortgage deals in past couple of years.
You can also read the Finance sections of popular newspapers or ask the opinion of specialist buy to let mortgage brokers if you want more detailed information about available deals in the market.