Now that we are in the final quarter of the year many of us start thinking about 2020 and beyond. The buy to let market will always be appealing to investors but is now the time to enter the market, expand your portfolio or should you be thinking about an exit strategy?
If you are new to the market you should be aware of some of the differences between a buy to let and a residential mortgage. Deposit, fees, and interest rates on buy to let mortgages are usually somewhat higher than residential, but as with any type of mortgage, the more you can put down as a deposit, the better the mortgage deal you could get. Talking to a specialist in buy to let mortgages will minimise the impact of higher costs.
Interest rates for 2020 are a slightly unpredictable question at the moment. After predictions of rises in 2018, by February this year the Bank of England was saying that depending on economic data and the outcome of Brexit the next moves could be up or down. With inflation falling and other indicators uncertain the Bank now suggests that a fall is the most likely next move at some point. This means that mortgage rates are likely to be attractive for the buy to let investor for the time being. Again, it is worth talking to your broker about what may be available.
The current economic uncertainty has undoubtedly affected the housing market, with house price growth slowing year-on-year and the number of sales dipping in recent months. This means that the prospects of the investor picking up a well price property are good. The possibility of price falls over the next year with rises returning in the following years. So, for the buy to let landlord who is looking for a longer-term investment it may be worth considering what options are available in your chosen area.
There are changes in tax relief and stamp duty to consider, as well as some other changes in legislation mostly aimed at weeding out the minority of unscrupulous landlords. With advice from a reliable mortgage broker and insurance advisor it may be that 2020 is the time to consider if a new or expanded portfolio. As always, I am happy to review your specific circumstances so get in touch if you need some advice.