Property Buying Clubs Return - Approach with care!

Feb 17th 2010

Property buying clubs return - approach with care

Recent reports suggest that property buying clubs are on the rise, offering promises of 'simple lending and instant equity'. NLA is advising members to be cautious and to make sure they do their research thoroughly before investing in rental property.

David Salusbury, NLA Chairman said:

'Many property buying clubs promise to make the UK a country of property millionaires. However, there is a real danger in encouraging such massive speculative investment in residential accommodation. Investors in residential property should be focused on the provision of affordable and decent homes over a much longer period of time. Many individuals have been stung by these clubs and our advice is to approach with great care.'

Homematch have seen this in action - where the initial rental appraisal on new / investment property has been up to £200 in difference than an honest rental appraisal & yield would be on any property.

Homematch can offer you a more "Honest" rental valuation.

  • Check the rental appraisal on any property with at least 3 agents.  Many over price to get your custom then blame the flooding of the market.
  • Check you have covered all the hidden costs.  Most new build flats have service charges of up to £1500 per annum in the Nottingham area & higher in some other places.
  • Check the build guarantees.  These have some loop holes, especially up to the two year period even where there is a structural & bad workmanship issue.  Unless everything if finely checked you could easily be out of pocket. In some cases we have had problems appear after the two year deadline where the builder is at fault but just quotes - it needs to be reported before the 2 year deadline.
  • Check what's included in a sale.  If you include white goods, carpets etc you are realistically paying for them on your mortgage way past their life span, making a cooker a very expense item. if you buy on an interest only BTL mortage you've never actually paid for anything - you are speculating on the housing market - sometimes you loose!