Mortgage Update- 19/11/04
Buy to Let Still Strong - even with
possible house price falls
A lot of attention has focused recently
on the 'slowdown' in the rate of property
price rise. The Bank of England
expects prices to "fall modestly
for a period" (read the
Money Telegraph story) While some
may have expected landlords to stop buying
property, we have seen a continual number
of applications going to lenders, and
many experienced landlords are still investing.
These landlords are usually buying for
a particular market i.e. office workers,
housing associations, and thoroughly research
their rental returns.
State of play:
- Research your rental market, this
will help you build your portfolio.
- The financial markets are already
predicting slightly lower fixed rates.
- You may also be able to take advantage
of newer fixed rates that are available.
- You may be able to now reach your
preferred rental repayment figure, and
add to your portfolio.
What it means to you?
With new fixed rate deals available
as lenders take advantage of swap rates
that predict a possible decline in overall
interest rates in 2005, there may be more
flexibility if you have identified any
properties that you think are right for
your portfolio.
Use the GoBusinessFinance Marketplace
to source Buy
to Let and Residential Investment Mortgages.
Investment Portfolio Schemes
A couple of our lenders have started
to offer stronger investment schemes aimed
at the professional (commercial or residential)
investor. They are beginning to offer
longer interest only periods and mortgages
terms over 10 years but with the calculations
made over 20 years.
What it means to you?
- This enables a "bullet"
payment at the end of the mortgage and
enables an investor to possibly have
a more flexible mortgage at the beginning
of the term.
- Create flexibility on the properties
you purchase.
- Possibility of refinancing your current
portfolio (allowing a higher gearing)
If you are an investor with a property
in mind today GoBusinessFinance can offer
an answer for your investment needs now.
Visit our marketplace to see how we can
assist with your commercial
property investments.
Pressure on upward-only rent review...
The Office of the Deputy Prime Minister
issued a consultation paper this summer
over the possible ban on upward-only rent
reviews. The ODPM is keen to ensure that
tenants are provided with alternative
forms of rent review. Some commercial
tenants are unhappy that they never pay
"market rent" and that their
rent can only go up at rent review. The
consultation ended last month but John
Clare (the chief executive of Dixons)
recently commented that "Dixons is
already reshaping its property portfolio
in the UK, closing a third of its town
centre sites and concentrating its business
in bigger and cheaper out-of-town units."
What it means for you?
If the ban is introduced, we may find
lenders becoming more conservative, their
security of repayment might be removed.
This may make commercial investment mortgages
harder to acquire. Pay attention to your
"upward-only" clauses in your
tenancy agreements and notices from the
ODPM. View the latest Commercial
Mortgage Quotes from GoBusinessinance.
Arvinder Mangat
Head of Commercial Mortgages
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