Posted on: 12-05-2018 in UK
Buy To Let (BTL) could be big in the UK in 2018. After the attacks last year by the UK Government on mortgage relief, it looked like the end was nigh for BTL. It’s no secret that Brits have always been fond of investing in bricks and mortar but, with home ownership in England at its lowest level for 30 years and the private rental sector doubled in size since 2004, maybe the fundamentals are in place to support a resurgence in UK landlords?
The Halifax, Britain’s biggest mortgage lender, has announced that UK house prices fell by 3.1% in April, the biggest drop since September 2010. But is this a bad omen of things to come for UK property or a natural ebb in an otherwise flowing market?
Russell Galley, managing director at Halifax, said that demand for houses has been weak in recent months, despite the onset of Spring and the usual start of the house-buying season. Though this is not reason to panic. Historically, house prices only fall rapidly and consistently when people are forced to sell up, through unemployment or big increases in borrowing rates.
Galley states “The UK labour market is performing strongly with unemployment continuing to fall and wage growth finally picking up. These factors should help to ease pressure on household finances and as a result we expect annual price growth will remain in our forecast range of 0% and 3% this year.”
If you have the money to invest, property is an increasingly affordable option right now.
Interest rates were widely expected to rise this year following the increase last September from an historic low of 0.25% to 0.5%. However, the British economy was hit hard in March by the “Beast from the East, which brought parts of the country to a standstill and slowed growth in the economy to just 0.1%. UK retail sales saw the biggest drop in a year and the Office for National Statistics reported a fall of 1.2% in March as freezing conditions gripped the UK.
Britain’s bad weather has meant that the Bank of England has frozen interest rates giving homeowners and investors time to cash in on the lower fixed-rate mortgages for a few more months.
Experts in the economy predict that this reprieve will be brief, as interest rates look set to rise towards the end of the year.
It’s always a good idea to research your investment options for yourself, and your Holborn advisor can help you to steer your way through your investment choices and make decisions that are right for you and your future needs.
If you, like many others, feel safe with bricks and mortar and are considering becoming a property investor, there are some important factors to bear in mind:
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