Well over the weekend yet more negative news from the media regarding the UK Property Market and in particular the London Property Market where it is stated as factual that prices are still dropping. While it may be true overall it is not true when looking in some areas of London where prices are stable.
So how does this affect the First Time Buyer?
You will have read from my earlier blogs that I do not believe that buyers when looking to purchase a property must first of all be concerned as to price. In my view the property is first and foremost somewhere to live and only secondly as part of a long term strategy an investment since everybody knows that property values go down as well as up.
On this basis it is still wise to purchase a property since mortgage payments at the present time are still lower than most people will pay in rent.
So on the assumption that you are proposing to buy a property it is important that you also understand that the process can take on average eight to twelve weeks to be finalised and in the case of leasehold property even longer.
After you have negotiated the purchase price your lawyers start working on raising questions about the property from your sellers through their lawyers and other agencies including the local authority. In addition they will deal with the contract checking progress on your mortgage and preparing the purchase documents including a transfer. It is only when all the information has been obtained that matters can progress to exchange of contracts.
On exchange the completion date is agreed which is usually ten working days from exchange to allow sufficient time to deal with last minute searches and questions which may arise on the mortgage.
On the completion day access is usually available from midday and in the event that either you or your seller fails to complete for whatever reason compensation will be payable by the defaulting party.
In my next blog I will attempt to give a brief overview of why Identification and proof of address is now needed on all property transactions in the UK
Showing posts with label conveyancing. Show all posts
Showing posts with label conveyancing. Show all posts
Tuesday, 27 May 2008
Friday, 25 April 2008
Why Buy To Let?
Good Afternoon Everyone. Today I thought I would talk about the Buy to Let market and in particular answer the following three questions:-
1. To buy or not to buy?
2. To sell or not to sell?
3. What are the risks?
A Buy to Let property is normally a UK property being purchased usually with the aid of a mortgage to be let at a monthly rent following completion to individuals or companies on a monthly rent.
If you listen to the media, be it television, radio or newspapers, you will be hearing that the property market is in free fall and prices are therefore dropping.
In the light of these predictions, it is important to understand why you may wish to purchase the property and what are the advantages.
The first point to recognise is that entering into the Buy to Let market cannot be short term and must be part of a long term investment strategy since as you can see, property values go down as well as up.
It is my considered view that entering into this market at this stage is in fact a sensible strategy provided that you have fully investigated the risks and, so far as is possible, planned against the property being empty for any period.
So is now the right time to buy? In my view, with a falling market and a part of a long term strategy, now is a very good time to buy, particularly as other Landlords who have entered into the market only very recently or have failed to plan, now need to offload their properties. These can usually be obtained more cheaply and sometimes with the benefit of a tenant still being in occupation.
As regards a sale, I think that in the present climate, it is better, unless you need to do so, to hold onto the property and continue to have it let out.
It may sound obvious but, with first time buyers not being able to get onto the ladder because of mortgage shortages, they will need to find properties to live in and this will be in the rental sector. As there will be a shortage of properties available in the rental sector and a lot of prospective tenants looking for property then the rental likely to be achieved in respect of the property will increase. If this is planned correctly using the right advisers then is may be possible to increase the rent every six months.
It is important that the credit checking, holding of the deposit and preparation of the tenancy agreement is prepared by a suitably qualified lawyer.
The risks associated with this type of transaction is that you may find that the property falls in value below the amount you have borrowed on mortgage and also that you may not be able to find a suitable tenant. Clearly, so long as you have given careful thought to your attitude to risk, then it is unlikely over a long period of time that you will lose your investment. If the values increase of course this leaves you free to raise additional capital to purchase other property but as in all property matters it is important that you do not over borrow.
I hope you have enjoyed reading my blog.
Reg
1. To buy or not to buy?
2. To sell or not to sell?
3. What are the risks?
A Buy to Let property is normally a UK property being purchased usually with the aid of a mortgage to be let at a monthly rent following completion to individuals or companies on a monthly rent.
If you listen to the media, be it television, radio or newspapers, you will be hearing that the property market is in free fall and prices are therefore dropping.
In the light of these predictions, it is important to understand why you may wish to purchase the property and what are the advantages.
The first point to recognise is that entering into the Buy to Let market cannot be short term and must be part of a long term investment strategy since as you can see, property values go down as well as up.
It is my considered view that entering into this market at this stage is in fact a sensible strategy provided that you have fully investigated the risks and, so far as is possible, planned against the property being empty for any period.
So is now the right time to buy? In my view, with a falling market and a part of a long term strategy, now is a very good time to buy, particularly as other Landlords who have entered into the market only very recently or have failed to plan, now need to offload their properties. These can usually be obtained more cheaply and sometimes with the benefit of a tenant still being in occupation.
As regards a sale, I think that in the present climate, it is better, unless you need to do so, to hold onto the property and continue to have it let out.
It may sound obvious but, with first time buyers not being able to get onto the ladder because of mortgage shortages, they will need to find properties to live in and this will be in the rental sector. As there will be a shortage of properties available in the rental sector and a lot of prospective tenants looking for property then the rental likely to be achieved in respect of the property will increase. If this is planned correctly using the right advisers then is may be possible to increase the rent every six months.
It is important that the credit checking, holding of the deposit and preparation of the tenancy agreement is prepared by a suitably qualified lawyer.
The risks associated with this type of transaction is that you may find that the property falls in value below the amount you have borrowed on mortgage and also that you may not be able to find a suitable tenant. Clearly, so long as you have given careful thought to your attitude to risk, then it is unlikely over a long period of time that you will lose your investment. If the values increase of course this leaves you free to raise additional capital to purchase other property but as in all property matters it is important that you do not over borrow.
I hope you have enjoyed reading my blog.
Reg
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