Here is Property Options’ latest update on the UK Buy To Let (BTL) market – for October 2018.
This update is by economist Chris Worthington, who is a regular PIM speaker.
Bank of England’s view
Mark Carney, the Governor of the Bank of England has recently warned the cabinet that a no deal Brexit could crash house prices and send another financial shock through the economy.
The cabinet meeting was part of “no deal” planning sessions that discussed the “unlikely” scenario” that the UK leaves the EU without an agreement in place. He met senior ministers to discuss the overall risks of a disorderly exit from the EU and in the housing market the worst case scenario was a fall of up to 35% in house prices over three years leaving many property owners in negative equity.
Reaction from the property industry to the Governors statement and the future of house prices has been mixed. Here are some of the recent comments:
- Independent property expert Henry Pryor (the BBC’s favourite property expert) supported the Governor pointing out that he was not predicting Armageddon or that house prices would fall by a third but he was making sure that if it all went wrong the bank is prepared.
- Nationwide’s latest House Price Index shows that for first time buyers house prices are around the highest compared with incomes that they have been in 35 years. The implication is that house prices are set to fall.
- Paresh Raja, CEO of Market Financial Solutions said that the uncertainty about the nature of the UK withdrawal from the EU has not dampened the spirits of property investors with real estate historically proving itself to be a safe and secure asset.
There is not much information on government websites that will help BTL investors evaluate the risk of the possibility of a fall in house prices associated with Brexit. With a shortage of facts and figures and widely varying views from the industry how should buy to let investors mitigate the risks arising from Brexit?
Last month we recommended that investors should look closely at the annual rate of return before making a new investment.
What are the other options?
- Have an informal chat with your advisors, your mortgage broker, letting agent and accountant and take up networking opportunities to talk with other landlords and investors.
- Read the business pages of newspapers, including the Bricks and Mortar supplement in the Friday edition of The Times.
- If you are of a serious disposition, the odd copy of The Economist would not go amiss.
- And of course keep reading the Property Options Buy To Let Market Overview!
Our Next Property Meeting
We will all be discussing the latest position on the property market in Bristol and across the UK at our next PIM on Thursday 25 October 2018 at Future Inn, Bristol, BS1 3EN.
We hope you will join us then.
For more info and to reserve your place Click Below