Best Areas to Invest
According to the latest Zoopla Report, Manchester and Liverpool lead the way on property house price growth with over 6% YOY. Please see the snippet below. For the full article, please use the link.
Over the past decade, we have been recommending clients to the North-West, in particular, Manchester and Liverpool. These two cities are witness huge amounts of growth and offer some great rental yields of up to 10%. However, with price increases as they have been it is becoming more difficult to find higher income-generating properties. They are still there of course but they are much harder to find.
So with interest rates at an all-time low, the cost of lending is also at all-time lows. Halifax has recently released a 2 year fixed rate mortgage at 1.43% which is some of the lowest we have seen.
With mortgage rates are at all-time lows it is a great time to leverage with a mortgage to maximize your return on investment (ROI). One thing we need to look at is what happens if the Bank of England moves the base rate to negative. The reality is we won’t see too much change as the base rate is pretty much at 0% anyway. However, we have seen Jyske Bank offer mortgage rates of -0.5% which means your debt falls faster than you pay it off but that is unlikely to happen in the UK.
Back in March 2020, there were over 5,000 different mortgages borrows could choose from. April 2020 that figure dramatically dropped to close to 2,000. However, we are now seeing big increases across the board in the number of mortgages available. In fact, at the time of writing there are 3,215 different types of mortgages currently and we expect this to continue to increase over the coming months.
Mortgage rates and availability are the backbones of the property market. The fact that we have seen an increase of 42% in the respect of availability is a huge plus and shows the confidence of lenders getting back to the market and increasing stability after COVID.
We leave you with a reminder on Stamp Duty…..
So as of the 1st April 2021, the stamp duty holiday is set to end meaning that anyone completing after this time will have to pay extra stamp duty costs.
Whilst the official line from the government is that they won’t extend, we feel that they may be some form of leeway given due to the time solicitors are taking to get deals exchanged and completed.
We have spoken to various leading experts within the industry and the consensus is that the government may allow anyone that has exchanged contracts before 31st March and complete after to still benefit from the stamp duty holiday. We will keep you posted with any news on this.
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