The property market in the UK is pretty much closed due to the coronavirus pandemic so we thought that we would bring you something different to think about when the pandemic is over. There are always a lot of myths and exaggerations in property investment and this is not going to stop.
So in this post we will look at some of the more recent myths that have arisen about property investment and explain to you why you should ignore them. Property investment is difficult enough without having to listen to these hyped up myths.
1. There will be a Housing Crisis due to Brexit
This is a classic myth that resurfaces again and again. Nobody knows what the impact of the UK leaving the UK will be as far as property investment and the housing market is concerned. Despite this, so called “experts” are more than happy to spread doom and gloom about how Brexit will negatively impact the market.
Putting the coronavirus pandemic to one side, the start of 2020 saw a strong housing market in the UK with house prices rising. This was mainly due to the general election victory in December 2019 and there being a clearer future as far as Brexit is concerned.
The Prime Minister, Boris Johnson, was determined to get Brexit done and this has helped the situation in the property market significantly. With house prices and rents continuing to rise, property investors can look forward to a bright future despite what Brexit challenges arise.
2. It’s too difficult to get a Mortgage on a UK Property
If you have the cash to purchase a property for your property investment business then this is always going to be a good option. But it is not true that you cannot get a mortgage for an investment property these days.
The source of this myth has some foundation with overseas buyers that want to invest in UK property. It was getting tougher for them to raise the finance that they needed but certainly not impossible.
For UK property investors there was a period where it was more difficult to obtain buy to let mortgages for example, but this is certainly not the case now. We recommend that you find a good mortgage broker to work with and forget what the high street financial institutions are offering.
Having a good mortgage broker on your team is great because they will be able to find mortgage offers for you that you couldn’t find on your own. So if you need finance for your next investment, do not pay any attention to this myth.
3. Stamp Duty and Taxation Changes make Buy To Let Unprofitable
When the government introduced the stamp duty and tax relief changes there were a lot of private landlords that decided enough was enough and listed their properties for sale. This soon escalated into the myth that a buy to let strategy was no longer profitable and property investors should no longer consider it.
But the private rental market still has high demand and good yields are still very much possible. Also bear in mind that rent prices are rising which is a way to compensate for the rise in taxes.
What smart property investors are doing with buy to let is to look further afield. It is not impossible to make a profit in London and the South East but it is quite a challenge. There are other cities in the North West and the Midlands where higher yields are possible.