The UK housing market has been in a state of flux in recent months, with house prices decreasing while mortgage rates increase. This has caused some landlords to be wary of investing in property, as the risks associated with such an investment have increased. However, there are still some landlords who are taking the plunge and investing in property despite the current market conditions.
The UK housing market has been in a state of decline since the start of 2019, with house prices falling by an average of 1.2% in the first quarter of the year. This has been largely attributed to the uncertainty surrounding Brexit, as well as the increasing cost of living and stagnant wages. At the same time, mortgage rates have been steadily increasing, with the Bank of England raising its base rate from 0.75% to 1.00% in August 2019. This has made it more expensive for potential buyers to secure a mortgage, and has further dampened demand for property.
Despite these conditions, some landlords are still investing in property. This is largely due to the fact that rental yields remain attractive, with landlords able to secure returns of up to 6% on their investments. Furthermore, with house prices falling, it is possible for landlords to purchase property at a discounted rate, which can help to offset the increased cost of borrowing.
It is important for landlords to be aware of the risks associated with investing in property during this period of uncertainty. In particular, they should be aware that house prices could continue to fall, and that mortgage rates could continue to rise. Furthermore, they should ensure that they have sufficient funds available to cover any unexpected costs, such as repairs or maintenance.
Overall, while house prices have decreased and mortgage rates have increased, some landlords are still investing in property. This is largely due to the attractive rental yields that are available, as well as the potential to purchase property at a discounted rate. However, it is important for landlords to be aware of the risks associated with such an investment, and to ensure that they have sufficient funds available to cover any unexpected costs.