INVESTOR DEMAND IS RESILIENT DESPITE PROPERTY MARKET CHALLENGES - JAXON STEVENS - FINANCIAL REPORTER
03.11.23
INVESTOR DEMAND IS RESILIENT DESPITE PROPERTY MARKET CHALLENGES
Jaxon Stevens, Sales Director at Tuscan Capital Limited, discusses why demand from landlords and property investors is continuing in the current property market but why speed has become even more vital when purchasing property.
There has been plenty of discussion in recent months about the difficult spot the property market is in. The increases to interest rates on regular mortgage deals has had an inevitable knock-on effect on demand from potential buyers, and therefore house prices. The latest Halifax house price index for example suggested prices have dropped 4% over the last year.
These headline trends don’t tell the whole story though. We have seen resilient demand from landlords and property investors, who recognise the fundamentals behind this sector remain excellent. The underlying imbalance between supply and demand of property means that when investing in the right areas if you know what you’re doing, decent margins can be achieved.
This is well illustrated by the level of interest in auction purchases of late. New data from EIG shows there has been a sharp increase in the number of property lots over the last year, up by 50% annually. But there has also been a jump of around 39% in the number of lots being sold.
In other words, while more sellers are turning to auctions in order to shift their properties, greater numbers of buyers have realised they offer a great opportunity to pick up a quality asset at a competitive price. We have certainly seen a stark increase in interest from auction purchasers.
Spotting Opportunities
Even outside the auction houses, it has been encouraging to see how positive many investors are around potential purchases. Taking that long-term view means they can see the opportunity these properties offer overall, rather than becoming fixated on any short-term challenges.
Just within the capital for example we have recently taken on cases including a £2.8 million purchase in Chelsea from a repeat borrower, a £350,000 deal to refurbish a property in Chingford, and a £450,000 facility for the purchase of a semi-commercial property in Ealing.
These borrowers have different backgrounds, some having been builders who can take on the refurbishment work themselves, or simply landlords with experience in the area so they understand the local market.
What unites them is the desire to improve those properties, to develop them so that they meet the needs of local residents or tenants and secure a profit in the process.
Doing so relies on working with lenders who take a similarly positive approach towards this market, and are equally keen to pursue deals that make sense for all involved.
Moving Swiftly
The ability to conclude cases quickly, irrespective of whether landlords are looking to purchase or refinance, has always been important. However, in the current climate, it has become ever more vital.
If an investor has spotted a property at auction, or listed on the market generally, then they need to be able to rely on getting funding in place rapidly. Similarly, if they are looking to refinance, perhaps because their existing deal is coming to an end, then doing so before moving onto a reversion rate is crucial.
This has been emphasised by the reception to the Fast Track process at Tuscan in the year since its launch. The process makes greater use of AVMs and desktop valuations, alongside title insurance and search indemnity policies, and has led to tangible improvements in completion and turnaround times.
Read the article on Financial Reporter.
For more information or to get in touch with the team, please contact us:
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Email info@tuscancapital.co.uk
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A range of case studies demonstrating examples of previously completed loans can be found here.