Is Now A Good Time To Invest In Nottingham's Buy To Let Market?

9th December, 2015, by

The hot topic of discussion at dinner parties of Nottingham’s movers and shakers is the subject of the Nottingham property market, but in particular, buy to let. These people are snapping up buy to let properties quicker than an ace Monopoly player … or so it would seem if you read the Sunday papers. So is the buy to let market a sure fire way to make money?  Is it something everyone should be jumping into? The answer is not as straight forward as you would think, especially after THAT shock announcement in the Autumn Statement. It’s more important than ever that you make an efficient investment, not a reckless one.

Previously you could simply flick through Rightmove or Zoopla, pick the property of your choice, agree a price after finding a modest deposit of 25% and finally, get your tenants, which the current market is doing seemingly quickly whilst securing impressive rents. Done. You can now sit back and live comfortably. The rent will cover the mortgage payments, with surplus, then come retirement you have a property portfolio that’s quadrupled in value. Sounds wonderful, doesn’t it? Or does it?

There are two main issues that are preventing many from being able to agree wholeheartedly either way:

Stamp Duty

In light of the Autumn Statement, many landlords are feeling the pressure to make the move before new legislation comes into effect in April 2016. From that date, purchasers of buy to let and second homes will have to pay 3% above the standing average stamp duty tax. It’s a substantial change when previously homes under 125,000, which were a common price bracket for buy to lets, were not subject to any charge.

This means it’s a prime time for investors and sellers alike, as homes are expected to go quickly and at good prices. However, for purchasers, it’s essential you only make the move when you’re informed about the location you’re investing in to, to avoid making an impulse purchase that won’t be beneficial in the future. Is the investment in an up and coming area where house prices are set to soar? Is there demand for rented accommodation in the area? Are you working to a budget that allows for any fluctuations in the market?

Oliver Marshall, of the City Centre sales team comments:

 “The changes in stamp duty announced in the Autumn Statement will definitely have an effect on the buy-to-let market here in Nottingham. We are forecasting that many investors will have urgency to find and to complete the purchase of a buy to let property prior to April 2016 , but we urge anybody considering buying to consult our team to gain a local insight before making the leap, and for any sellers to contact us to see how they could benefit from this rare opportunity in the market.”

Inflation

Let us also not forgot that the 0.5% Bank of England base rate is artificially low. The international money markets can be fickle and if interest rates do rise quicker and higher than expected because of some unforeseen global economic situation, the mortgage payments could become more than the rent.

Hannah Merritt, lettings consultant at FHP Living, Comments:

“It important to keep in mind that it’s a long term investment; buy to let is a ten, fifteen, twenty year plan and budgets need to be at the heart of a decision. Fluctuations in the market must be anticipated, tenants will come and go, so we advise that landlords should allow for void periods, plus agency fees and of course the maintenance costs of a rental property… all things that eat into that profit.”

You wouldn’t dream of investing in the stock market without advice, so why invest in the Nottingham Property Market without advice? Professional intel is the strongest asset you can get.

Working specifically in the local area means we are at the heart of the changing trends in the Nottingham property market, which is currently so strong that our sales team are completing within weeks of putting properties onto the market, and our lettings team are finding tenants at the same rate, so we can help you make an informed and efficient investment, not a reckless one.

For further information, please contact our lettings consultant Hannah Merritt on Hannah.merritt@fhpliving.co.uk or 0115 941 5934 or our sales team on 0115 941 5920