According to recent researched commissioned by Paragon Mortgages, a fifth of all landlords in England are looking to expand on their property portfolios in the next 12 months, but is it the right time for them to be investing in more property?
With the reported risk of another fall into recession, the value of property could start to fall dramatically once again and so a newly bought property could lose a lot of its value. The other worry for landlords during recession is tenants not being able to pay their rent, and if they can’t, a mortgage on a new property may be an annoying cost!
However, 57% of the landlords surveyed by Paragon believe that the immediate future looks bright for the private rental sector, and there are a lot of good reasons for this:
Struggling First Time Buyers
With first time buyers finding it incredibly difficult to secure mortgages, given the high level of deposits they need, the rental market is booming. This means that landlords are finding it easier to fill their properties with tenants, and given the rise in competition for rental accommodation, can even charge slightly more for the properties.
Low Interest Rates
Although first time buyers are finding it difficult to secure mortgages, if you have capital behind you and the funds available for a deposit you will find some excellent bargains on the property market. The economic turmoil and lack of new buyers has seen property prices fall over the last year and so if you can afford the deposit on a new house, you may find a bargain on the property market and end up with a very low mortgage.
Government Schemes
We are all aware of recent cuts in Government funding, but there are still many new housing schemes coming into affect that can secure additional income for landlords. New green housing and social housing schemes can bring in additional income for landlords, making the property a more profitable investment.
With the current economic problems, there is a risk that tenants may default on rent payment, but with a comprehensive Landlord Insurance policy this risk is covered and you can enjoy the perks of a booming rental market, low house prices and Government funded schemes.