With financial forecasters preparing their predictions for the housing market in 2012, it seems more than likely that landlords in the UK are set for another bumper year.
December is always the time when experts come forth with their predictions for the following 12 months and this year most of those involved in the housing sector are of one mind…house prices will not increase. The prospect of a double dip recession and the continuing Eurozone crisis has convinced experts that there is little prospect of house prices going up, and in fact, most predict they will fall, which is certainly good news for landlords looking to add to their portfolio.
Capital Economics, a London based consultancy, echoed the thoughts of many housing sector experts when they said: “It is hard to see any reason to be optimistic. Another recession is likely, increasing the pressure on prices.”
They added: “Even so, with interest rates at historically low levels and lenders willing to show forbearance, it seems more likely that house prices will fall gradually, perhaps by 5% over the year, rather than suffer a repeat of 2008’s slump. But there is a risk of developments in the Eurozone triggering larger dislocations in financial markets and a deeper recession than we are currently forecasting.”
With little competition coming from families looking to buy their own homes, property investors look set to get more bargains as sellers become desperate to get rid of their property, however, mortgage brokers are steadily noting an increase in home loan interest rates as the Eurozone crisis makes the bankers nervous.
Landlords may be well advised to arrange a landlord insurance quote, and new mortgages earlier in the year rather than later. Already several mortgage lenders including Santander, Woolwich and ING have recently raised their rates.