Buy-to-let market in Blackpool "amazing"
Blackpool has experienced an "amazing" increase in property investment by buy-to-let landlords, it has been claimed.
Mark Fletcher, manager of the Bispham office of McDonald and Company estate agents, said that "there's an awful lot of" buy-to-let investment in the city.
"There were some rental surveys recently and the amount of buy-to-let borrowing going on between 2001 and 2007 is amazing," he said.
"People are buying [properties], doing them up and reselling them. There's a lot of that going on."
Regarding areas of Blackpool which are popular for buying property, Mr Fletcher recommended "anything around the hospital", as well as Stanley Park, Bispham and "anything near the coast".
However, Mr Fletcher remarked that the current interest rates have affected the property market and made short-term returns unpredictable.
Still, he said that the company has not yet seen anyone lose out in the market and added that "when we've sold and resold it's always been at a profit".
Blackpool is located in Lancashire on the Irish Sea. It became popular for tourism during the 19th century, especially for people who lived in the mill towns of the north.
Latest From Buy To Let
When purchasing a buy to let property investors should always check the location. It is not a good idea to buy in a run down area as people are unlikely to want to live there and the rents would be very low. Nor is it profitable to buy where the market is already full of rental properties as this could mean that prices are kept down by competition and it can be difficult to let in this sort of area.
When searching for the required property it should be decided how much can be afforded. If finances are tight consider buying some where that needs work doing on the property as this is likely to be cheaper and can be renovated to a good standard without having to spend too much on the project. This should save you money in the long run. If tradesmen are to be employed make sure they have references, are hard working and reliable, a good relationship with them always helps.
Keep décor light and bright and neutral this will make the property seem bigger and airier and gives a blank canvas for furnishings.
Finances must be worked out before applying for a mortgage. Most lenders will now lend around 75% of the property value. Buy to Let mortgages are worked out differently from residential mortgages by the lenders. Most want to see approximately 130% rental income to mortgage monthly repayments.
When deciding on a type of mortgage it is well to remember that repayments have to be paid even if the property is empty and that rents do not increase rapidly so making sure that the payments can be covered at all times is essential. This also applies if a discounted mortgage is chosen the payments will increase after the special offer term is over.
Letting Agents, if to be used, fees, insurance and maintenance costs must be taken into consideration.
Rental Income is taxable but if the property is let furnished wear and tear can be claimed at 10% per year. Letting agency fees, gardeners or cleaners (for property rented out) and insurance can also be claimed when doing tax returns.
When selling a buy to let property it is worth noting that Capital Gains Tax, at 40%, will apply.
Is it the Buy to Let Blues
Buy to let mortgage figures from the Council of Mortgage Lenders suggest a booming market.
Well that was true for last year but things are not looking quite as good now.
Tenants are still to be easily found in towns and cities but this could change with the large amount of new build flats pushing down both rents and prices.
Apartment blacks rose rapidly with developers keeping up the demand from the buy to let sector.
Ten years ago new flats and maisonettes were only 16% of new builds, last year the figure was 46%. Many of these apartments were bought by investors some of whom hoped for quick monetary gain by reselling. Unfortunately that has not always been the case with apartments left empty and no one willing or able to buy them. Many prices have been reduced in an effort to sell them.
In Manchester it is reported that property prices have reached a plateau after a huge property boom period. But they are not alone, Leeds, Nottingham and Birmingham all have seen a large amount of apartment blocks erected but when it comes to selling it maybe the buy to let blues.
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