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Property owners and investors will triumph.

As predicted, the pound is in free fall and the world stock markets are gyrating but this will be short lived, there is no need for landlords to panic following Britain’s decision to exit the European Union, once the speculators have calmed down and new investors seize the opportunities that will arise Property will remain to be the favorite topic of profitable investment conversation it has always been.

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The National Landlords Association (NLA) agrees with our ‘Don’t Panic’ stance.

Landlords have already started to compensate for the various tax measures announced by the Chancellor George Osborne, including higher stamp duty rates, while mortgage tax relief will begin cuts from next year. Tougher buy-to-let mortgage lending criteria has not been the deterrent that puts off serious investors either. The National Landlords Association (NLA) does not necessarily believe that a Brexit should add to landlords’ troubles as an exit from the EU may not have an adverse impact on the private rented sector, especially now that the Bank of England and the Treasury have confirmed that they have extensive contingency plans in place to ensure the country’s financial stability.

Richard Lambert, chief executive officer at the National Landlords Association (NLA), said: “Let’s just everyone, take a long, deep, calm breath.  Leaving the EU is completely unknown territory, and jumping to conclusions isn’t going to help anyone. We welcome the Mark Carney’s steadying words and his reassurance that the Bank of England and the Treasury have extensive contingency plans in place. Any knee-jerk reaction will have a real impact on our members’ mortgages, tenants’ rents and overall confidence in the market.  So we would urge the policy as regards to interest rates should be, to continue the Prime Minister’s analogy, one of steady as she goes.”

“Fixed-rate mortgages ‘likely to get even cheaper’ following Brexit” (see mortgage best buys - click here)

A fall in gilt yields will reduce the cost for lenders of longer term funding and hence open the door for even cheaper fixed rate mortgages, according to Ray Boulger of John Charcol.

Given that most mortgage lenders did not pass on much of the pre-referendum reductions in rates, Boulger expects to see greater price competition, especially in the longer term fixed rates, helping to push already cheap fixed-rate mortgages to new lows. He forecasts that many lenders will follow HSBC’s lead and slash five-year fixed-rate mortgages priced to below 2% – perhaps at around 1.95% – and advised those thinking about taking out a fixed deal to “hold off for a week or so and see where the market settles down”. A longer term look at implications for the housing market suggests demand for property will continue to increase, Boulger added. “Until we actually leave the EU, immigration is likely to continue especially in the run up to any potential tightening of border controls.” 

Remember the fact that since the last In/Out EU Referendum in June 1975,

property values in Britain have risen by 1750.93%

Since 1975 we have experienced double digit interest rates and more than one economic dip, credit crunch, recession.

Have property investors made significant profits? YES

SO, what is the best thing to do?

Cash income is king so buying property for rental yield is a firm strategy for successfully profiting. Especially with the long term growth profit property has provided and will continue to.

Fortune makers see the opportunities, make decisions and act. The wait and see crowd fail to make profit till the opportunity is not as advantageous or often the procrastination sees the opportunity vanish entirely.

House prices could in the short term come down a small % as prolonged uncertainty and a potentially weaker economy has an adverse impact on the market. This creates buying opportunities now. The general housing shortage means that prices should rise shortly after, seeing continued exceptional capital growth profit in the medium to long term. Indecision and waiting to see will cost you immediate rental returns.

The dramatic drop in the value of the UK pound has alerted many shrewd international property investors. Many property investors from around the globe are taking advantage of the vastly favorable exchange rate and snapping up bricks and mortar in the UK.

Let us all not forget the basic supply and demand point, residential developers and their financiers will be less willing to commit to new property projects in an uncertain economic climate. This will make it much harder for the government to achieve its target of building 1m new homes by 2020. This will add to the supply-demand imbalance, placing upward pressure on house prices and rental values in the longer term.

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Conclusion

The healthily rental market will carry on functioning despite the UK’s decision to exit the EU. Buy at a price discounted more than any perceived short term fluctuation and you are in immediate profit. Over time values will increase as they do to see values above where they are now adding further profit to rental income. Rents are on the up, due to supply and demand and this is bolstered further due to taxation changes encouraging Landlords to up rents to compensate for additional taxation. Landlords ensure profits are maintained and improved for all property investors into the future with the rental increases. To add to these points, the fixed rate mortgage rates dropping would see further monthly income fixed for specified periods. (see mortgage best buys - click here)

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An informed investor is a successful investor!

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