Housing Market In Deep Trouble - Interest Rates, Bond Yields Rising, Buy...

Housing Market In Deep Trouble - Interest Rates And Bond Yields Rising, Buy-to-Let Properties No Longer Viable

The housing market is heading for serious trouble in the UK, US and many other countries as the worldwide economy slows.

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I think house prices will continue to fall, especially with higher interest rates on the way and landlords selling up for a number of reasons.

 

Will there be a property crash? Quite possibly depending on future government action. Right now, they are doing little to help property owners and especially landlords.

 

Should the government bring back mortgage tax relief for residential homeowners? This was abolished by the then Labour Chancellor Gordon Brown.

 

Bond yields rise

 

More bad news to come – The FT reported rising Bond yields today and food prices are set to soar again following the destruction of the dam in Ukraine which has flooded and destroyed thousands of square miles of Wheat and Soy fields.  This will put more pressure on inflation.

 

Is the ‘buy-to-let’ market dead?

 

Buy to lets deals just don’t add up anymore with higher rates. I’ve been offered properties which have great yields and would’ve looked amazing with lower interest rates. But when you look at the deal in light of a 5% or 6% interest rate (even on an interest only mortgage) the rent barely covers the payments.

 

When you factor in other costs, such as service charges, repairs, insurance, agency or management fees, voids and so on the real ‘yield’ is negative. 

 

I’m also hearing directly from landlords who are selling their perfectly good properties due to higher interest rates and because they are higher rate taxpayers. 

 

Higher interest rates, together with George Osborne is helpful Sec 24 tax changes have made their existing buy to let property unviable.

 

If your properties are in a limited company you are not affected by the tax changes, but moving your property from your personal name into a limited company can trigger CGT and Stamp Duty, plus other costs, if not done correctly.

 

See: – Transfer Property Into A Limited Company Without Paying CGT or Stamp Duty https://youtu.be/mtGq7WaVxLA

 

See also:

Watch More Mortgage Misery For Property Buyers As Bank Raise Rates Again:

 https://youtu.be/BNe5eV37iiM

Interest Rates Will Rise, Property Prices Will Fall And Opportunities Will Open Up:

https://www.youtube.com/watch?v=ziTf2jOagB8&t=179s

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