As the summer months come to a close, and some of us prepare for a few months of hibernation, the opposite seems to be occurring in the property investment market, which has well and truly awoken in recent weeks.
Across the entire Andrews network, we’re witnessing property investors coming back in to the fold, seeking to expand their portfolios and hold on to these investments over the long term.
The range of products aimed specifically at the buy-to-let market at the moment is looking particularly positive with a number of new offers being launched in response to this renewed strength. Typically, if you’re able to put down a deposit of at least 25% you’ll expect to get the best rates and some of these right now are very, very low.
Overall, it feels like a very positive time to become a landlord. Average rates of growth over the short to medium term are anticipated to be somewhere between 3 and 5% (according to Halifax), and could go even further in particularly popular and buoyant areas; there is a growing number of tenants looking to rent properties; and the stock market continues to feel an uncertain bet for sound investment.
But whilst there are many positive aspects of becoming a buy to let investor at this time, caution should still be employed...
Get your house in order
Simply, do not proceed with viewing properties until you have met with a local property expert so that you clearly understand the types of housing being sought by tenants in your area.
Also, ensure that you’ve got a clear view of how the financial side of such an investment will stack up and preferably have your finances in place ready to proceed once you have found your ideal property.
Finally, you should also be aware of how recent legislative changes could impact on your investment.
Do your legal homework
May's Queen’s Speech outlined a move to shift responsibility to landlords and lettings agents for checking the immigration status of any prospective tenant to ensure that they have the ‘Right to Rent’.
This will entail identity checks and a credit check alone simply won’t do. Of course, a letting agent can conduct this on your behalf, but don’t assume that they will as this could leave you exposed to a costly fine of up to £3000.
Looking ahead meanwhile, from October all landlords will be required by law to install working smoke and carbon monoxide alarms in their rented properties.
You must ensure that there is at least one smoke alarm per floor, as well as Carbon Monoxide alarms present in any rooms containing a solid fuel burning appliance – failure to do so could result in a penalty of £5000.
So whilst the buy-to-let market is looking very positive for property investors at this moment in time, we’d always urge you to do your homework to save incurring any costly fines.
*David Westgate is Managing Director of Andrews Letting & Management