IT ’ S A HIGH-TIME FOR HYPER-SONIC MISSILES
BY CHRISTIAN COVENTRY OF CONCEPT MORTGAGES
At a time when much of the world is thinking about hypersonic missiles ( excuse me for crow-barring a Sam Fender reference in there ) it seems that many people in the UK are getting whipped up into a home-buying frenzy causing house-prices to skyrocket quicker than , well erm a hypersonic missile .
A big factor in the escalating property market is the return of the “ Buy-to-Let Investor ”.
It ’ s true that the Buy-to-Let investor never really went away , not completely , but it seems that anyone who has ever had an inkling to start , or return to , property investing has maybe felt pressure into bringing their plans forward fearing the housing market may escape them .
Many potential property investors will of course be sat on the sidelines hoping that the current stratospheric prices will soon come crashing back down to earth allowing them to pick up a bargain , but that hasn ’ t stopped scores of eager potential landlords tapping their reserves to invest in bricks and mortar , hoping to bolster their retirement plans or in some cases , simply to make a quick buck .
This of course is a self-perpetuating market and although it will slow down eventually , this doesn ’ t appear to be on the horizon anytime soon . Food , fuel , houses , cars , luxury goods are all seeing spikes in prices which makes the current economic climate feel like a gigantic Ponzi scheme . Maybe a little dramatic , but you can hopefully see my point . Bitcoin anyone ?
It ’ s worth remembering of course that most property investors will have to ensure there are enough funds in their coffers to cover the dreaded 3 % stamp duty surcharge and other associated fees . I say most , as there are sections of the market that escape this tax . Commercial properties for example or mixed-use properties , which is the type that has a residential flat above and a shop below , to name a few exceptions .
When this tax was added in 2017 , it was thought it would be the death-knell for the smaller property investor , but nothing could be further from the truth . Admittedly this has frightened some people off buying a second property , but in the most part it is seen as the cost of doing business . For a typical £ 150,000 residential rental purchase , the cost of the stamp duty surcharge could be covered within the first twelve months of ownership , assuming the property is let at the market rate .
Not only are there currently no shortage of homebuyers , but Estate Agents are also reporting up to 30 potential tenants for each rental property that is coming to market . Meaning of course , that rental costs are being pushed up to keep pace with house price costs .
These circumstances are symptomatic of the changes that people want to make to their lives in the post pandemic world , with a commonly shared view being where and how I live my life is more important than my bank balance .
Last month I reported on the 40-year fixed rate product , which created a lot of feedback from readers .
Another startling fact to illustrate how things have shifted in the world of lending is the advent of a lender who is now not only prepared to fix for the life of your mortgage , but that will also lend up to seven times your income !
This type of mortgage is limited to certain professions , but if you are young , have low outgoings and are working as a Solicitor , Accountant or Doctor to name a few of the high-flying professions on the list , then this could be available to you . Don ’ t expect market leading rates , however .
This is being pedalled as a market innovation , but it feels like we have been here before . “ Play it again Sam !”
52 wirrallife . com