Home information packs – burden or blessing for buy-to-let investors?

Press release: 31 October 2005

Home information packs – burden or blessing for buy-to-let investors?

At first glance, buy-to-let investors probably read with some dread the news that the Deputy Prime Minister looks to now be finalising plans to introduce home information packs (HIPs) in 2007. 

Collective sighs were likely as investors envisaged extra potential costs in an already tough market.  The buy-to-let market has already seen margins fall in 2005 as result of a wider downturn in housing market growth.  Investors may also be concerned that these measures may destabilise the housing market.

After initial reservations however the measures may actually not be a gloomy as they first appear.  The measures designed to ease the costs for first-time buyers to may also benefit the investor by easing their costs too.

Jonathan Moore, marketing manager at buy-to-let mortgage brokerage Mortgages for Business explains: “Full details on the seller’s pack remain grey at present, but the prospects for buy-to-let investors are not all bad.  Firstly if the buy-to-let mortgage lenders choose to accept the property valuation set out in the sellers pack rather than their own independent valuation, then the investor has no need to pay a valuation fee.  Although this seems unlikely at present as the lender will want to be sure of the property price, it could potentially happen.”

“Additionally many property owners may decide to sell quickly before the 2007 deadline, giving buy-to-let investors the opportunity to pick up a bargain.”

“The biggest consideration for investors should however remain on the effect the new rules will have on the wider housing market.  If they encourage more first time buyers into the market, property capital appreciation could begin to increase, pushing up the investor’s overall returns,” concludes Moore.

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Notes for Editors
Mortgages for Business are independent experts in buy-to-let and commercial mortgages managing single and multi-let property portfolios for thousands of UK investors.  Its brokers have access to a large portfolio of fixed and variable interest rate mortgages from a panel of over 30 lenders and offer truly independent advice that is appropriate to investors.