Although property prices vary across the UK, with fluctuations in value, it is still more likely that property prices will increase long term.
According to data produced by Zoopla, property values have increased by 18% during the last decade, and are 260% higher today than 20 years ago. Although investing in property is viewed as one of the best ways to increase savings, landlords now face even more issues when investing in property.
From the end of September this year, landlords who have four or more mortgaged properties will have to produce their entire property portfolio for the lender. Financial information for each property will have to be submitted by the landlord, so that information including outstanding loans and rental income can be considered. The Prudential Regulation Authority from the Bank of England tightened the rules for buy-to-let lending in 2016, increasing requirements for rental coverage. This now stands at 140% to 145%, which means that for every £1,000 of mortgage interest due, the rental income must be £1,450.
Although there are more risks and responsibilities involved in becoming a landlord, there are also benefits to investing in property. Property values generally increase long term, and in some of the more affordable areas, values are tipped for growth. As property prices continue to rise, more people are being priced out of buying a home, which creates higher demand for rental properties.
Before deciding to invest in property, consult a mortgage advisor who has the necessary CeMAP training and many years’ experience in the property market.
Posted by Mark
September 16, 2017
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