So it’s that time again when we take a look at the news that surrounds the buy to let market. As you could likely expect, most of the current news talks about the rising interest rates, inflation and the cost of living, which we know affects us all. If you follow our property news segments every month, you know we have delved into these topics and given our take as to how these can affect the market.
However, if you do have questions in which you cannot find an answer, next week our latest webinar ‘How to Invest During Times of Inflation‘ is live 31st May 2022 at 1pm. Here you can put forth those questions to our MD Christopher Whetstone who will be hosting.
Despite all of the negative news relating to the above topics, property prices are still continuing to push forward and hit another high this month. As you can see from the graph below released in an article by the Telegraph, property prices have risen for the fourth straight month. The average home has now grown to a record £375,501 – this is a massive £55,000 growth since the start of the pandemic.
It’s great that property prices are still growing, this really highlights what we said at the beginning and during covid, when many people felt that the property prices were going to plummet.
This really shows that despite what we all think and the negative news, the property market is much more resilient than we think and it’s still a great time to invest no matter what we read in the news.
However, all this being said, we do feel that this growth will start to slow down towards the back end of the year. We will start to feel more of downward pressure from the rising interest rates and cost of living although we do not expect it to fall by 15-20% like some ‘experts’ are quoting.
Where should you NOT buy?
So as a company, we are always analysing the market on the best buy to let areas from both a rental and growth perspective.
Now as we always say, London is not the best place for this which is why we focus on the North-West. These are the areas that are witnessing higher yields and double digit growth YOY.
The table above just highlights this and shows that despite London being the capital, more often than not, it doesn’t make sense to purchase here. That is also not forgetting the higher prices and the more in stamp duty that you would have to pay.
This is backed up by this a headline snippet from Manchester News (below) showing that Manchester has been one of the best performing cities over the last 20 years for house price growth.
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