I had a lovely long chat during a dog walk with a lady who lives in one of those super properties opposite Highgate Wood. She was thinking of buying her first buy to let property and wanted my opinion on the state of the market and if it was a good time to invest.
She was understandably worried by recent newspaper headlines declaring ‘war on buy to let’. I have to admit these changes have ruffled a few feathers, but low interest rates and a volatile stock market still make property an attractive investment. One of the best bits of advice I can share with anyone wanting to invest in buy to let is to pay attention to doing your sums and make sure deals stack up. Its likely that mortgage costs will rise, and investors now have to take into account extra stamp duty, however Muswell Hill house prices are continuing to rise (at least 6% per year for the last 5 years) and tenant demand remains strong (in particular for renting by rooms - but more of that on a later blog). You can judge the affordability of an areas housing market, and therefore how much rental demand there could be, simply by finding the ratio of average property price to average salary. The lower the ratio, the more affordable the property is.
So, when we put this to the test we found that N10 Muswell Hill currently has an average property value of around £773,100, with the average salary being £40,988. That's a ratio of 1 to 18.86 - the national average is 1 to 11.45, so pretty much everything is expensive! Yet, the issue is not just affordability, its also raising the 5% deposit to buy the house in the first place, which when you take into account fees will be around £41,000.
Tenants inability to raise money for that kind of deposit continues to drive demand for rental property. If you would like advice feel free to pop me an email over to firstname.lastname@example.org