Q: So if it’s still a challenge, is it worth considering properties as a long term investment?
A: Definitely. House prices have really increased, certainly over the last 12 months. Therefore, property is becoming a great investment for people that want to protect their money when they come into retirement age. And it's still great for getting an income. The rental market is so buoyant currently as well, we're certainly finding there aren't enough properties for the number of people that are looking to rent at the moment. I suppose the biggest challenge in the market has been people trying to secure lending for these properties because the growth has gone up and prices have increased. But, there are certainly lots of things that lenders are more accommodating with at the moment. They do look at affordability more, that is when somebody has got more affordability in their income per month. And lenders will use that to effectively top up the rental value calculation in order for someone to get the loan that they require.
Q: Talk to me about short term options, including consent to let - can you just explain a little bit more about that to me, please?
A: Yeah, sure. So a lot of people at the moment might want to up-size to their next property. But they don't necessarily want to sell their property, their existing one, they may want to keep that rented out, and again, have that for the long term, for when they retire. So a lot of the time the lender that they are currently with will agree to them renting it out. They will keep the current terms and conditions of their mortgage and get the authority to actually agree to rent out that property. So it frees them up then to buy their next property to live in. So we'd always encourage people that potentially are in that situation and don't want to change their mortgage, to speak to their existing lender, because there are options available.
Q: With the end of the stamp duty reduction, there's going to be a few properties that people are struggling to sell. So obviously, from that point of view, turning it into a buy to let would be a nice easy option for people.
Absolutely, and it's really simple to do. A lot of people do think it's more complex than it actually is. And we'd always encourage people to pick up the phone to us and go through the different options available. Because it is such a good idea to keep your property. People want to keep their properties at the moment and it is quite simple for them to do that and still upsize and move to (or downsize and move to) the property they want to live in.
Q: Yes, I can definitely vouch from the lettings side that we have heavy demand for rental property. The minute property comes on to the market, it is letting really quickly. So from our point of view if people are struggling to sell then definitely letting out property is the easy option. And they may make a lot more long term investment gains than they would by having that money in the bank.
A: Absolutely. We're finding it all the time at the moment. And a few people have been put off by the yields and the restrictions that have been put in place over the last few years. But we really wouldn't encourage people to be put off by that, because property is still a great investment. Lenders are still accommodating to enable you to still get the borrowing needed. It is such a buoyant market and there aren’t enough properties available to meet rental demand.
Q: What would you consider to be a decent yield then at the moment for a landlord?
A: It's so difficult because every area is different in terms of house prices. A lot of people look around the 5% mark but it depends upon what they want to achieve. If they would like something that gives them a monthly income, perhaps not necessarily have property for the long term, they might want to keep quite a good rental income, but maybe buy a lower priced property. Some people like to invest maybe in a higher priced property, because they look more long term to supplement their pension. So it completely depends on goals and circumstance. The yields are different in every location - but we're still got that demand for every property!
Q: I suppose it depends in terms of areas, but capital growth is key really, isn't it?
A: Absolutely. And I think that with current demand, I've seen so many people that want to now change their current property in order to buy a bigger property because the market has grown so much. They've seen their friends do it. They've seen their friends rent out their current property, and so they then don't want to get rid of property because they see it as a great investment. So we're seeing that become so much more common in the current marketplace.
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