"Buy An Unlimited Number Of Bargain Properties AND Get Paid For The Pleasure!..."

It’s been a very interesting year for property investors.
Two important events for you to note:

1. Interest rates are now at 5.5%
2. Home Information
Packs or HIP’s as they are otherwise known are NOT going to be introduced on the 1st of June 

What are the implications?

Your monthly mortgage repayments will go up unless you are on a fixed rate mortgage/s. This is
generally not good news for property investors or property developers
who...

End up with a double whammy…

when interest rates rise because they think market growth is going to slow.

Their repayments on a mortgage are also going to be higher which affects their motivation to move.

Secondly, developers borrowing costs rise making it more expensive for them to hold on to trading stock. This can make their developments less profitable overall.

Property investors also find it harder to make their property deals stack up because the rental achieved will not so easily cover the mortgage repayments. 

Most lenders look for at least.100% (most want between 120%-130%) coverage.

This means a monthly interest repayment of £400 must be covered by rent of at least £520 in the case of 130% coverage. When rates go up, rents will likely stay the same which means your deals become harder to stack up for lending purposes.

What about property investors?

We tend to spend more time worrying about short term market movements and not so much time on the longer term perspective... Continued ..

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