Watching the Market Turn: Where UK landlords should really be looking

by: Sarah Maple
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In February, those with their eye on the UK housing market would have noticed the confusing and conflicting data given by two of the leading house price indices, Halifax HPI and Nationwide HPI. At that time, whilst the latter had published a recent drop at 1.3 percent, Halifax were indicating that the market was on the up with an increase of 1.9 percent. At the beginning of April, however, things had changed. As sure as Halifax were publishing a drop in the market of 1.9 percent, Nationwide had seemingly changed places and were now describing an increase at 0.9. So what should be at the forefront of the minds of UK landlords currently?

You'd be forgiven for thinking this was utterly misleading, but many who are involved in the industry will agree that there are some fairly logical assumptions that can be made when the market acts in such a way. As opposed to seeing all indices presenting a comparable decline, the data we have seen over the last couple of months can give the impression that the market is on a gradual turn. If this is the case, of course now might really be the time to bag that bargain of a property - with the summer months to spruce it up in time for next winter.

Another thing prospective landlords should be keeping an eye on specifically is the LIBOR Rate. LIBOR stands for the London InterBank Offered Rate which is essentially a reference (set daily by the British Bankers Association) of the rate of interest banks agree to charge and lend money to each other. Although LIBOR had been soaring comfortably at around 6 percent up until October last year, the rate has been steadily declining since and is currently at nearer 1.5 percent (in April 2009). This, of course, is good news for the housing market generally, and especially those considering buy to let mortgages.

Additionally the Chancellor of the Exchequer, Alistair Darling, announcing the latest budget has pledged to contribute £500 million to the housing sector. Such a move by the government has no doubt been welcome, yet many within the industry are speculating as to the actual worth of the sum. It is no secret that £100 million of that amount is being specifically sidelined for the building of eco-friendly homes (which has been regarded as ‘woeful' by Greenpeace), with the rest being put towards the building of new properties.

What landlords need to focus on is the fact that, according to David Orr (The National Housing Federation's chief executive) et al, we are still to witness an 88 year low of just 70,000 new homes built this year, meaning rentals may remain a necessity to many. Also, in order to completely be sure of your bargain, carefully take into consideration regional price differences. For example, in the North prices fell 9.7 percent just last month whilst the average market process were said to be increasing.

Article Source: http://www.ArticleStreet.com/profile/sarah-maple-4310.html

About the Author

Find out more from Mortgages For Business, including a blog on latest events affecting the UK mortgage industry. http://www.mortgagesforbusiness.co.uk are buy to let mortgage specialists.

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