Property owners can still win big in 2023 despite high interest rates
Image by Oleksandr Pidvalnyi from Pixabay
While the cost of living crisis continues to cause problems across the board, savvy property owners and investors can expect a good year in 2023. And that’s despite interest rates still hovering above 6% – which is admittedly the lowest rate since September.
On the face of it, property owners and real estate investors still face several challenges in the foreseeable future. However, there are several sources of positivity.
Firstly, a number of homeowners are discovering that financial benefits may be available to them. Even on properties that have been bought some time ago. For example, the stamp duty refund is available on homes that required work to make them hospitable. This includes damp repairs, mould removal, and structural changes. Moreover, it can be used in relation to residential properties purchased in the last four years.
In the case of the stamp duty refund, it is possible for homeowners to receive a significant payout worth thousands of pounds in under one month. There are other schemes available for homeowners that have been hit by the cost of living crisis. Support for Mortgage Interest (SMI) plans are a good example. This can help them navigate short-term issues to stay on track for long-term success.
The housing market is expected to correct itself in 2023, which is a far better situation than what we saw in 2008 and other financial downturns. So, homeowners looking to sell are unlikely to lose out especially as the average property rose by £40,000 between 2020 and 2022. Conversely, though, bold buyers will be able to secure good deals. It is especially true if they target people who are determined to sell following divorces, inheritance, or job losses.
Landlords and property owners with multiple dwellings will also see new doors open. Taking on multi-unit properties can be very accessible at this time as lenders look to low-risk borrowers. The use of interest-only investments can be useful too. Meanwhile, the possibility of renting a room or turning a single home into shared housing for multiple tenants is accessible too. A growing number of tenants want affordable rentals while it is a good way to maximise monthly revenues.
There are a variety of alternative options for generating revenue too. The demand for staycations and domestic holidays is set to soar in 2023. As such, owners of properties in cities or popular UK vacation spots can thrive by selecting short-term rental models. Holiday homes, for example, only need to be filled for a percentage of the year to see bigger profits than traditional tenant contracts.
Another way for developers and investors to win big is to look for low-cost properties that can be purchased in cash or with small mortgages. This bypasses the issue of high-interest rates, which can use the current housing market to your advantage. Many homeowners are rethinking their home improvements due to the cost of living crisis. So, those that do need to hire contractors may secure better value for money on those jobs.
The road to success might not be as smooth for all property owners as it was in previous years. With the right strategy, though, great results are still achievable.
