What has the Help to Buy scheme done to the Cheltenham and Gloucester property markets?

The Government launched Help to Buy last year to give a boost to the housing market. The Help to Buy scheme involves the Government guaranteeing up to 15 per cent of a mortgage, acting as an indemnity for the banks and building societies who sign up (so far only three banks have done so). This means lenders can provide mortgages more confidently to borrowers with a 5 per cent deposit. It will apply to all types of properties, first-time buyers, home movers and re-mortgagers.

Quite interestingly, first timer buyers have had access to 95% mortgages since 2010 so I am not sure what it will do to the market, except highlight that property can be bought with a 5% deposit. Scheme or no scheme, Cheltenham and Gloucester continues to have a buoyant property markets. Prices are rising, but not at the double digit level that was experienced in the early to mid 2000’s. If the scheme enables those who want to buy, to buy, then that can only be good for everyone in these areas.

Over the last 2 or 3 years, it has mostly been landlords that have been buying property in Cheltenham and Gloucester to let out. Carrying out a quick search on one of the price comparison websites, I was able to find in seconds that landlords can get fixed rate buy to let mortgages from as low as 2.99% until the end of 2016. With rental yields in Cheltenham and Gloucester of around 4% to 7% per year and the values increasing by 6.8% in Cheltenham and 10.3% in Gloucester, and the overall yearly return is the region of 10% to 16% per year.

However, buying a buy to let property is full of pitfalls. If you have a good tenant, in a good property and a good relationship between tenant and agent, then not much can go wrong, as long as the relationship between the landlord and agent is exceptional. I pride myself on exceptional relationships with my landlords and their continued business speaks for itself.

If you are considering becoming a new buy to let landlord, feel free to pop your head through the door of either of our offices in Cheltenham and Gloucester for some advice and opinion on what (or not) to buy. It is true the property market is showing signs of good improvement, but, if you know where to look, and more importantly, what to look for, there are still bargains in Cheltenham and Gloucester to be had.