The 5th of March 2009 was the date Mervyn King,
the then Bank of England Governor, slashed UK interest rates to the unparalleled
figure of 0.5%. In just under five months, starting on 8th October
2008, the rate had come down from 4.5% to that low figure, all in an attempt to
ensure the British economy survived the worldwide credit crunch. Now as we deck
the halls with bows of holly nobody expected that, over six years later, rates
would still be at that low level.
In the summer, people were predicting a rise in the New
Year, yet now, some forecast it may remain the same for years to come the due
to the issues in China. Now, I am not some City Whiz kid with a hotline to Mr
Carney at Threadneedle Street, but merely a humble letting agent from Huddersfield,
so I can not profess to know what will happen to interest rates. However, what
I do know, speaking to my Huddersfield friends and Huddersfield landlords is
that these low interest rates have hit savers really hard.
If you added up everyone’s bank and building society savings
in the UK, they would add up to £1,300,000,000,000,000,000 (that’s £1.3
trillion), most of which is earning a pittance in interest. That is why
more and more 40 and 50 year old Huddersfield landlords have been investing
some of that cash into Huddersfield bricks and mortar, as they search for a low
risk investment opportunity.
Buying a Huddersfield buy to let property isn’t risk free,
but there are certainly things you can do to mitigate and lower one’s exposure
to risk. You see by buying a rental property, it potentially offers an enigmatically
decent proposition in terms of being able to obtain attractive returns that beat
inflation and savings accounts, yet without taking the levels of risk
associated with stock markets.
The UK residential property market has long been the safest
form of collateral for lenders of all varieties. Against a backdrop of a
greatly changing economic environment, Huddersfield house prices have been
extraordinarily robust, increasing by over 1413.7% between 1974 and today. Some
will say there have been significant property price falls, namely in 1975, 1988
and 2008, yet each time after this has been followed by an upturn in
property values. For the record, the stock markets in the same time frame only
rose by 432.5%!
.. and that is the best thing about buy to let property. Unlike
the stock market, with its unfathomable equities, shares and bonds, that nobody
really understands (as they are controlled by some faceless whizzkid in Canary
Wharf!) with a buy to let property, landlords can take control and
understand their investment .. in fact you can touch and feel the bricks and
mortar investment.
.. but before you go
out and buy any old Huddersfield property, plenty of landlords still get it
wrong.
You have to be aware of your legal responsibilities when it comes to
tenant safety, tenants deposits, energy certificates and in the new year, landlords
will have the added responsibility of checking the immigration status of prospective
tenants. Get it wrong and big fines and even prison is an option – but that’s
why many agents use a letting agent to manage their property for them.
Next, you have to buy the right property at the right price.
Recently I have seen some really heart breaking situations in Huddersfield and
the immediate area, of people paying way too much for a property, only to lose
out when they came to sell. One example that comes to mind is that of a
property owner in a terraced house on Honoria Street, just off Huddersfield’s
main A641 .. a decent two bed end terrace, 44 sq metres inside (473 sq ft in
old money) sold in November 2005 for £57,500. In the summer, it only obtained
£50,000, a drop of 13.04% or 1.41% a year - a very disappointing result.
I cannot stress enough the importance of doing your
homework. One source of information and advice is the Huddersfield Property
Blog where I have similar articles to this about the Huddersfield property
market and what I consider to be the best buy to let deals around at any one
time in the town, irrespective of which agent it is on the market with. If you
haven’t visited and you are interested in the local property market in Huddersfield
.. you are missing out! http://huddersfieldproperty.blogspot.co.uk/
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