Green shoots for property sector
The new year has brought fresh hope for the property industry, following a series of escalating challenges in 2023.
It is hoped that a freezing of the bank’s base rate, lowering inflation, and a recent reduction in some lender’s mortgage rates, will mark a trend in bringing much needed relief to a struggling housing sector that had become increasingly stagnant in the face of rising costs.
Andrew Smith, Partner at Smith and Sons commented: “The drop in some lender’s mortgage rates will hopefully be felt across both the residential and the buy to let sectors. There was inevitable and increasing levels of concern as buy to let owners were forced to take on considerably higher lending rates, once their fixed rate mortgages had come to an end, with higher repayments, squeezing margins, and in some cases, making the rental property proposition an unviable one”.
“With an average 1% drop and a hope that this figure will continue to fall in the near future, we will hopefully begin to see increased activity across the board. We are seeing some buy to let investors considering offloading their portfolio as the returns simply haven’t been there, but some have decided to retain their buy to let properties long term for investment purposes and with the potential of seeing future capital growth gains. These recent ‘green shoots’ will hopefully be recognised as a positive development, and encourage landlords to hold on to their stock.
“On the reverse side, rental yields are at high levels, with exceptional demand for rented properties from tenants. We believe that whilst the market will always fluctuate, property on the whole remains a sound investment long term. Our expert team at Smith and Sons can provide advice on all property related matters, be it residential or commercial property, with supporting services and products.”
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