FIX YOUR MORTAGE AT 3.5% FOR 10 YEARS

One of the big risks to all landlords, myself included, is rising mortgage rates. We've been insulated from this for a while now - rates have been at an all time low for many years - but don't be complacent about that - just as some people allowed themselves to believe that property prices couldn't crash, in 2007 they did. In the same way whilst some people believe that mortgage rates will never rise, at some point, they will! As such fixing your rate at a manageable level can be a good idea. 

There was good news for investors this week as a couple of mainstream lenders announced 10 year fixed mortgages from under 3.5%. Until now this sort of offer has been available for private purchases but not for investment properties - that is clearly changing. If you're investing for the long term, as many new purchasers are, this means you can have visibility of your main cost for a decade.
This means spending £125,000 on something that will rent for £600PCM (there are a few options in this price range), will mean you would end up with a monthly mortgage payment of less than £250, fixed for 10 years - so the income and cash flow would be pretty good. I have an investor applying for one of these things currently - she's taken £30k out of her bank, expects to get £250 per month income after all costs - a 10% return (based on the £30k), plus the benefit of (hopefully) appreciating property prices over the next 10 years. 

New mortgage products like this, or changes to pension rules which take place later this year, have the effect of drawing even more people to investing in property. If you're thinking of the same, and want to discuss your options, please get in touch with us for an initial chat.