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Ask A Mortgage Broker Before Investing In A Second Property

Mar 13, 2008
Mortgage brokers often advise those that can afford it, to invest in a second property. It's all about the bricks and mortar apparently. But we're not talking about buy-to-let properties here where investors get a return on their money. We're talking of second homes. The ones that you see in quaint little villages that sit empty for ten months of the year.

These are the very ones that are turning whole villages into miniature ghost towns. The 240,000 second homes that were purchased last year are pushing up local property prices - pricing the locals out of the market.

If these homes are left empty for the majority of the year and there are too many in one place, it brings about a situation where schools and village shops close due to lack of business. Not only does this make it bad for the local residents but will these second home owners want to vacate to homes where there are no local facilities?

To counteract this problem, mortgage brokers need to be aware that the government are about to bring a crackdown on the purchasing of second homes. It is reported that they will be insisting that if the home is not the main residence of the owner, that permission to buy must be granted from the council in that area.

Some villages have 50% of their properties owned by outsiders that are empty for a large proportion of the year. It makes you wonder why mortgage brokers are not advising them to at least rent out these homes for part of the year - maybe as holiday homes or student accommodation.

Second homes abroad are an option for those who find the new laws a problem. Mortgage brokers are very useful when it comes to securing a mortgage for an overseas property. They can find you the best deal and are also a lot more knowledgeable about overseas property laws. With the precarious property market and hikes in interest rates in the UK, many people have been looking at overseas properties to invest in.

However, it would seem, this boom peaked in 2007 and is now in decline. Despite many Polish people preferring to move to Britain, their own property market performed well. House prices in Poland increased by a whopping 28% during the first half of last year - a good time to sell. Many mortgage brokers would have been securing deals on Polish properties for their clients.

However, a shift in opinion caused a downturn in the latter half of the year - a problem for investors that bought at the height of prices. However, mortgage brokers will be fighting to get good deals on properties in Ireland as prices there fell by 7% last year.

If you're looking for investment properties overseas, in fact, anywhere, the main thing to consider is how long you can afford to hang on to the property for. If it is a long term prospect, then you won't fail to make money. House prices fluctuate all the time and if you wanted to sell, you could choose your moment.

But for short term investments, this really is the time to be getting the best mortgage advice you can, as well as a good mortgage broker to secure you the best possible deal for the most return.
About the Author
Financial expert Catherine Harvey looks at the help afforded by a mortgage broker to those wishing to buy a second home. To find out more please visit http://www.pennypeople.co.uk/
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