As the property market boom continues to become a mere memory, lenders have begun to tighten the criteria on buy-to-let mortgages for new-build properties. This is because the lenders are regarding premium priced new-build property as a riskier asset to lend on when compared to older property.
Since 2000, it seems like everyone was jumping into the property market thanks to healthy yields and rocketing prices. Although the boom is over, experts say property is still a sound investment.
However, buyers must research the market carefully and should not overstretch their borrowing otherwise they may experience problems if market conditions become tougher.
Investors looking to buy property in the post-boom period should ensure they are in an area with a healthy source of potential tenants and that they don't overstretch their buy-to-let mortgage borrowing. Overstretched landlords can get into financial difficulty almost immediately if there are any void periods when tenants cannot be found.
Investors should also be careful about the type of property they buy and they must be prepared to hold the asset for the long term. In a slower property market, scope for immediate capital gain is reduced. It is important to invest for income as well as growth in order to not rely on the property rapidly increasing in value to make the investment viable.
In this day and age, investors should also keep an eye on buy-to-let mortgage rates for both new and existing properties. They should also remortgage to the best deals when possible. In the current market, lenders can offer some great deals as they scramble for market share.
Buy-to-let investing still pays for property investors who follow the age-old rules of buying in the right locations and holding their properties over the long term. Investors looking for short term gains will most likely not find what they are looking for in the current UK property market.
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