The Conservative’s and Liberal
Democrats launched Help to Buy last year to give a boost to the housing market. The Help to Buy scheme involves the
Government guaranteeing up to 15 per cent of a mortgage - acting as an indemnity
for the banks and building societies who sign up. This means lenders can provide mortgages more confidently to
borrowers with a 5 per cent deposit. It will apply to all types of
properties, first-time buyers, home movers and re-mortgagers.
Quite interestingly, first timer buyers have had access to
95% mortgages since 2010 so I am not sure what it will do to the market, except
highlight that property can be bought with a 5% deposit. Scheme or no scheme, Southampton
continues to have a buoyant property market. Prices are rising, but not at the
double digit level that was experienced in the early to mid 2000’s. If the
scheme enables those who want to buy, to buy, then that can only be good for
everyone in the town.
Over the last 2 or 3 years, it has mostly been landlords that
have been buying property in Southampton to let out. Carrying out a quick
search on one of the price comparison websites, I was able to find in seconds
that landlords can get fixed rate buy to let mortgages from as low as 2.99% until
the end of 2016. With rental yields in Southampton of around 5.4% per year
(although they can reach up to 8% per year depending upon the type of property)
and the values increasing by 6.3% in Southampton
the current overall yearly average return is the region of 11.7% per year.
However, buying a buy to let property is full of pitfalls. If
you have a good tenant, in a good property and a good relationship between
tenant and agent, then not much can go wrong, as long as the relationship
between the landlord and agent is exceptional. I pride myself on exceptional
relationships with my landlords and their continued business speaks for itself.
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