Five economic factors which affect your BTL business
Population changes = demand from tenants
Households = type of home required
Jobs & wages = determines rent levels
Inflation = affects costs
Interest rates = cost of borrowing = can affect property values
What we’ve learned from the recession?
Sometimes economics can go in your favour
–Interest rates fell to 0.5% and trackers/mortgage rates fell too
Sometimes it can go against you:
–Inflation rose to 4% at one point during the recession
–Although it’s now down to 0%
Rents move in line with wages – not inflation
Understanding interest rates and impact on mortgage costs essential
Follow CEBR and Capital Economics forecasters*
What was your property worth at the market height?
What did your property price fall to in 2009?
What is it worth now?
Has your property price recovered as fast as ‘the average’ property in Brighton & Hove?
•UK Economy will take time to recover
–Good news that UK seems to be recovering well
•Demand for PRS will grow naturally
•Need to protect your buy to let investment from:-
–Low capital growth or yields
–Increased enforcement and regulation
•There are always opportunities in property to make money
–You need to be clear about the returns you want
–Need good independent advice that you can trust
–Regularly review your portfolio to ensure it’s meeting your needs
–Keep up to date with the impact of BTL economics