Mortgage Availabilty Rising – Prices Still Well Below 2007 Peak

A study last month by Moneyfacts.co.uk has shown that the number of mortgages on the market is greater than 3,000 for the first time in 15 months and 42 per cent more than were on the market last July.

Recent additions that investors are to note are the introduction of a new 75% LTV product by Aldermore to compete with the likes of Birmingham Midshires, Cheltenham & Gloucester & Natwest as well as the emergence of the first 80% LTV we have seen in a while by the Mortgage Works.

Nationwide also announced today that house prices are 9.5% below their 2007 peak with transaction volumes still relatively low despite a slow return of more sellers in recent months. It is likely that the announcement of anticipated capital gains increases may prompt some landlords with more than one property to sell before tax rates go up which will shift the demand-supply balance back in favour of buyers, halting house price rises.

Buying below market value today and locking away equity is still very wise when taking the medium to long term view, particularly if buying wisely for monthly cashflow as well as growth.

SOLD – 2 Bedroom House, 23% Discount, Close to Lincoln Town Centre

Deal Summary


  • 2 Bedroom House + Conservatory
  • Good Location Close to Town Centre
  • 23% Below Market Value
  • £22,000 instant equity
  • £3198 per annum Cash-Flow Positive


The Figures


Market Value:                        £95,000

Purchase Price:                      £73,000

Discount:                                23%

Instant Equity:                      £22,000

 


Yearly Cash-flow

 

Rent:                                       £5700

Mortgage  (BM 4.35%):           £2382

Insurance:                                £120

Profit                                      £3198