Safe As Houses
Property is still the most popular form of long-term investment in the UK today.
Indeed, so popular is it that many are seeing it as a valuable tool to finance their
retirement and their pension, by investing in buy-to-let property – especially as
it is a lot easier for the layman to understand than the wheeling world of stocks
and shares.
There is plenty of demand for rental accommodation for a number of reasons, including
the rise of the general population and growing numbers of students. With interest
rates as they are, buy-to-let mortgages offer access to an attractive and alternative
form of investment. There is the added bonus that mortgage lenders are now in fierce
competition with each other to attract new customers, offering specifically-designed
and accessible mortgages for would-be landlords.
The Council of Mortgage Lenders (CML) released figures showing that the number of
landlords taking out mortgages increased by almost 50% in 2006 – and have been predicted
to rise again this year. Michael Coogan, the Director General of the CML said that
“the buy-to-let market has performed even more strongly than the wider market over
the course of 2006. With evidence from other sources of strong tenant demand, rising
rents and falling void periods, buy-to-let looks set to continue to remain popular
and successful.”
However, the venture into this world does require careful planning and research.
The main priority is the location of the property; its proximity to local schools,
transport links, night-life, universities and any planned developments in the area.
The internet can also give you an insight into any competition you might face, using
sites such as Right Move and Prime Location; these can tell you the average rate
for rental in certain areas and get an idea of where rental takes longest to achieve.
Cast around the web for mortgages to get a feel for what's out there. Lenders have
such a huge array of incentives and benefits/disadvantages of borrowing from them,
so it's important you're clued up. Many sites, such as Santander, have a
mortgage calculator, to help give you a quick, rough guide
to what someone in your circumstance can expect to get.
The type of tenant you are aiming at will also inform the type of property you buy;
students will require only basic accommodation to match the parameters of their
Student Loan. They may require a transport system that operates to their campus
and a range of local shops, whereas a young executive may be after something more
stylish with road and rail links and, perhaps, access to local night-life. A family,
however, will need more space and have a school in the locality.
Disclaimer - Important, this article is of a journalistic nature, and is
supplied by a journalist external to AgentQuote.co.uk. It should in no way be considered
as advice. Should you choose to act upon any information in this article then you
do so at your own risk. AgentQuote accepts no liability in respect of any information
contained within this article, or actions carried out in respect of it.