UK Property Prices Cut To Tempt More Property Investors

Thursday, November 20, 2014

UK Property Prices Cut To Attract More Buyers

UK Property Prices Cut To Attract More Buyers

Good News For Property Investors as Vendors Cut
Property Asking Prices To Attract More Interest

Residential property vendors all over the UK are dropping property prices in a bid to attract willing buyers during the traditionally quiet winter months, good news for residential property buyers but very good news for property investors purchasing using Buy To Let Mortgages,  with the biggest property price falls being observed in the regions outside London.

According to popular property portal, Rightmove, UK residential property asking prices have fallen by 1.7% during November 2014, seen by some commentators that the UK property market has begun to stall rather than the traditional property market slowdown in winter.

But the traditional November drop in residential property prices is the smallest observed for the last five years and the underlying demand for residential property remains strong but has been muted by higher prices stretching any potential buyer’s affordability, making the situation very tempting for property investors looking to expand rental property portfolio’s using buy to let mortgages.

  • £4,500 (GBP) Off Residential Property Values As November Prices Dip 1.7%
  • New Properties On Market Down By 15%
  • Average Residential Property Asking Price  Now £267,127 (GBP)
  • UK Property Prices Up 8.5% On 2013

Miles Shipside, spokesman for Rightmove, said: ‘Selling property is more difficult than it was earlier in the year, though the mini-boom experienced by much of the country has hit the pause rather than the stop button, the average property asking price is still up 8.5% annually at £267,127 (GBP), even after £4,452 (GBP) was shaved off by November’s cut. The ability to borrow more to fund higher property prices has been curtailed by tighter mortgage lending criteria.”

The biggest property price falls recorded in November were in:

  • South West – Residential property prices down 3.9%
  • North – Property Asking Prices Down 3.6%
  • North West – Property prices down by 3.3 per cent.

Only two UK regions witnessed a property price increase last month.

  • London – up 0.8% – average asking price – £601,180 (GBP) – (up 16.2% annually)
  • East Anglia  - up 0.7% – average asking price of £248,205 (GBP).

Year-on-year property asking prices have risen in every region in the country with London continuing to lead the way, although some estate agents report the market in the capital has seen a distinct cooling since the summer.

2014 to date has been the highest 12-month period for property transaction volume since 2007, with more and more property investors acquiring suitable rental properties using an abundance of buy to let mortgage products now on the market.

Finance 4 Landlords spokesman, Sim Sekhon, said “There is much conjecture about the state of the UK property market in the media at the moment with everyone waiting for another property bubble or property crash to happen. However property investors and portfolio landlords are well attuned to the continued strong tenant demand for rental properties and many are achieving excellent rental yields, so any drop in property prices could encourage more investors to get into property.”

Residential property buyers face more stringent financial obstacles to get over since the introduction of the Mortgage Market Review back in April, and the Council of Mortgage Lenders (CML) stated that the number of home loans approved by banks and building societies had fallen for the second month in a row in September, as lenders conduct tougher checks on a borrowers affordability and personal finances.

Buy to let mortgage lenders are beginning to adopt the practice of using affordability stress tests to ensure property investors can repay buy to let mortgage loans even if interest rates rise by 3 percentage points, personal finances are still taken into account however potential profits are also considered.

Buy to Let Mortgages Are Not Difficult To Get

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Buy To Let. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.