1st September 2006
Hot Property – Investment Q&A, Grant Bovey of Imagine Homes answers some questions
Will the recent interest rate rise and the feeling that more are to come have a dampening effect on the buy-to-let market in the next six months or so?
Rising interest rate commonly suggest a resultant slowing of the housing market; however, this is generally not the case for the buy-to-let market. Unstable or fluctuating equity markets have meant that buy-to-let continues to be an attractive option for investors, with house prices rising more than share prices over the last ten years (Halifax house-price index - June 2006).
With huge demand from would-be first time buyers and affluent young professionals, landlords are buying properties secure in the knowledge that there is good tenant demand for the right property in the right place.
With lenders including the Halifax revising their forecast for house price growth for 2006 to five per cent, investors in buy-to-let properties can also be confident of healthy capital growth on their investment.
Taking all of the above into consideration, long-term property investment remains an appealing option for investors regardless of short-term interest rate fluctuation.
What are people looking for right now in the buy-to-let market?
The majority of investors in the buy-to-let market are looking for the right property, in the right location, at the right price point. Proximity to city centres, good public transport links and local amenities are often key factors for property selection.
The potential for long term capital growth is paramount and as a result properties with long completions or areas undergoing regeneration are popular. Of course the difficulty accompanying this is the research and time required for investors to make a successful decision.
Where are the current investment hotspots?
The current investment 'hotspots' in the UK consist of a mix of established popular cities and some newcomers to the market. Large cosmopolitan cities including London, Bristol, Manchester and Leeds have and always will be popular amongst investors and Imagine Homes aims to meet that demand through offering investment opportunities within these areas.
Cities and towns that have recently seen an increase in popularity include Oxford, Cambridge and Brighton & Hove, each of which benefit from their picturesque settings, whilst Reading has become popular due to the large number of young professionals working in the area. North of the border, increasing population figures and solid rejuvenation over the past ten years has been Edinburgh become a sound investment area. However, investors must bear in mind that cities are large diverse areas and extensive research is imperative in choosing the right location in the right city.
For further information on Imagine Homes and their portfolio of properties simply log into imaginehomes.co.uk