Yearly Archives: 2016

4 things to look for in a gated estate

Gated estates are a popular option for prospective home buyers, offering a secure and open lifestyle. But not all gated estates are created equal – if you’re looking to buy in a gated estate, here are four aspects to consider in the estates that you encounter:

  1. Security measures

The top attraction in a gated estate for many people is the priority that they place on security. Access control at the front gate is the first place to look at when considering the security elements of a gated estate. The procedures that take priority should be strict controls for entry for people who are not resident in the estate.

The state of the fences and walls should also be considered. Ideally, gated estates should allow the houses in the estate to rely less on in-house safety measures, such as burglar bars, and high walls between properties. In order for houses in gated estates to take advantage of the reduced security imperative within the estate, you need to be assured that the outside barrier is up for the job. Security cameras and electric fencing should be par for the course.

While outside barriers are important, having a strong security presence within the estate is vital. Finding out the frequency of patrols, the available manpower, as well as learning about how previous incidents of crime in the estate have been handled will give you a good idea of what to expect in your prospective estate.

2. Amenities

There are a number of forms that a gated estate can take – some are purely residential, others integrate recreationally and business use into the estate as a whole.

There’s a great benefit to being able to walk to the shops or to be able to play a game of squash or round of golf. Investigating the options available to you will reveal that many gated estates offer options that will enhance your lifestyle in the estate. There’s a growing trend towards including schools in the gated estate’s plan – if you’re a part of a young family, living in an estate in which your children can walk to school without fear of harm should be an attractive proposition.

  1. Rules and regulations

Since gated estates are developed on privately-held grounds, those living in these estates are held to rules and regulations that are defined by the developers and developed by the trustees in the estate.

If you’re one who is fond of DIY, or if you have a creative streak in your gardening, you don’t want to be caught by surprise when your improvements fall foul of the regulations of the estate. The gated estate will have these rules and regulations publicly available, and you should take some time to go over the regulations that exist to see if you can happily live with them.

  1. Quality of houses

Since there is a booming industry in the construction of gated communities, many of those on the market will have newly-built houses. In older gated estates, you will be able to see relatively easily the quality of the builds on offer. The propensity of a house to aging-related problems should play a big role in your decision to buy – you don’t want to be having to deal with leaking roofs on a weekly basis.

In new developments, you can look to the developers, and their choices in architects and construction firms to establish the likelihood of problems in the house in the future. You can also safeguard your investment with sound home owner’s insurance.

Six things your buyers should consider before purchasing a holiday home or investment property

As a real estate agent, your job entails more than getting your clients to purchase a property; it also entails a duty of making sure that they are fully cognisant of what they should expect when purchasing a new home.

Your clients may be looking to expand their property investments following an increase in income or a financial windfall, either by investing the money in a holiday home or in an investment property from which they will expect to accrue a rental income. Property is among the surest investments, but many buyers can be caught out by factors that they had not anticipated or underestimated.

Taking your buyers through these questions will provide them with the depth of knowledge that they need to rationally evaluate whether they should buy their second property:

1. Can you afford the bond on the new place?

In today’s market, deposits on bonds for properties are high – the current average deposit in South Africa is 22% of the purchase price. Bond repayments are likely to be the largest regular payments that the buyer will make, but they’re not the extent of the costs that the buyer will have to anticipate.

2. Can you afford the costs?

Costs on a property can stack up. Some costs will be fixed, others one-off – fixing up the new property may be crucial if it is not a new development. Taxes on second properties can be prohibitive and might tip the second property away from becoming a reality. Being aware of the full extent of the costs of the second home is vital to ensuring that your clients don’t regret their choice.

3. Can you handle tenants?

For investment properties, securing reliable tenants is an integral part of having the property work as an investment – rental income has to cover the bond and other costs. Dealing with tenants can be stressful – if the tenants decide to leave the property, the buyers may not be able to cover the costs of the second property, putting their financial health in jeopardy.

4. How are you structuring the ownership?

In South Africa, tax laws can constrain those looking to buy a second home. The second property may put you in a bracket that you can ill afford, with capital gains taxes being levied on income from the property. How your buyers choose to structure ownership in their second property will have important ramifications for the affordability of the property.

Putting the property in a trust, instead of the buyer’s personal name, will let the owner protect the property from creditors, as well as inheritance costs, but means that transfer duty are a flat 8%, and, if the property is sold and the money kept in the trust, a capital gains tax of 20% will have to be paid.

5. Do you know the rules of the property and of the country?

If the second property that your owners want to buy is not a freehold, there may be rules that they have to adhere to from a body corporate or similar governing organization. Some of these rules may restrict the buyer’s plans. In the case of a time-share, the buyers should be comfortable with the rules of divisions of the property.

6. How will you take care of it when you’re not around?

The practicalities of a second property with tenants require the owner to be responsive to issues that might come up for the tenant. In the case of a holiday property, can they be confident that the house will be ok while they’re away? While the buyer might be reluctant to cut into their investment profits, it may be in their best interests to rely on the services of a reputable agent to manage the property in their absence.

Be a low-risk borrower and better your home loan prospects

If you’ve decided to become a homeowner, the first thing you need to do is find out whether you have a good chance of being approved for a home loan, or whether lenders will consider you too high-risk.

“It’s all very well to start looking at online listings or visiting show houses to find your dream home. But you first need to work out how much you can afford to spend, how you plan to finance your purchase, and then whether the banks will even consider you for a home loan,” says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator.

What the lenders look for

“Lenders are always on the lookout for low-risk borrowers. These are consumers with good credit records that show they have been diligent about repaying previous debts; consumers without so much current debt that it would be difficult for them to afford another monthly instalment; and, consumers who have a proven and regular source of income.”

“If you don’t meet these requirements they will put you into a higher risk category, which could mean that you need to put down a bigger deposit before they will agree to give you a home loan, or that they will charge you a higher rate of interest on your loan, or that they will refuse to grant you a loan altogether.”

Mr Rademeyer says that even if lenders consider you “high-risk” now, it is not the end of the road for your home ownership plans. “You don’t have to resign yourself to being a tenant forever. Work with a reputable mortgage originator like BetterLife Home Loans that can advise you how to become a lower risk prospect, and will then prepare, motivate and manage your application in a way that ensures its best chance of success.”

Mr Rademeyer says some of the most important steps for potential borrowers to take before they apply for a home loan include the following:

Pay all your accounts on time

This means bills should be paid before or on the due date. This may not seem like a big deal but, for example, if you are even three or four days late with your rent every month, it will show up on your credit record. That could make it look as though you are struggling to make ends meet and would not be able to cope with any more credit.

Clear up your record

Attend immediately to any serious defaults and debt judgments, and make sure they have been removed from your credit record once you have paid them off. Most lenders will not even consider you for any new loan unless you do.

Make sure that you have a clear record of income

Ensure that you have pay slips as your supporting documentation if you are in full-time employment, or, if you are self-employed, by the bank and financial statements and tax records. Ask your mortgage originator to review these and your monthly expenditure with you and help you work out what size home loan you might be able to afford.

Pay off as much of your existing debt as possible

If you have a large outstanding student or personal loan, an unpaid tax bill or a big car repayment to make every month, there is a big risk that your income won’t stretch to also cover a home loan instalment every month. So, you might want to consider renting a cheaper place, taking on a weekend job or downsizing to a cheaper car – whatever it takes to get that other debt paid off.

Save up for a sizeable deposit

Once you have an idea of the home price you could comfortably afford, you should aim to have at least 15-20% of this amount available in cash before you apply for a loan. Even if you don’t use it all as a deposit, saving diligently will demonstrate to lenders that you are financially responsible. It could also help you secure a loan at a lower interest rate, which would save you many thousands of rands over the life of your loan.

Six ways to build up your property rental business

Building up a “rental book” – a portfolio of properties which you rent out to tenants on behalf of landlords – is a great way to increase and steady the cash flow in a real estate business, but many owners and principals don’t really know how to win more rental management contracts from landlords.

Here are some expert suggestions, courtesy of Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator:

Tap into your existing network

The easiest and most cost-effective way to start building up your book is through the people with whom you currently already have relationships, especially those with whom you contact on a daily basis.

“You should never be afraid to ask for new business or referrals from friends or colleagues who may be struggling with a rental management problem. You will often find it resolves a problem for them, while at the same time boosting your revenue,” says Mr Rademeyer.

Put someone on the task full-time.

If you want to increase your rental management book and thrive, you need a person who is permanently looking for new customers and keeping in touch with existing ones. The ideal person for this task is someone with sales and customer relations skills who is 100% dedicated to acquiring and retaining rental business.

Build and maintain a database

It’s important to keep up-to-date contact details: landlords; tenants; tradespeople; prospective investors; prospective tenants; past landlords; past tenants; and past home sellers and buyers.

Communicate with all these people regularly, perhaps via a monthly newsletter. Increase business by offering incentives for landlords to transfer other properties to your agency, incentives for referrals that lead to new business, and incentives for tenants who purchase a new home through your agency.

Use proven rental property management software

Mr Rademeyer notes that there are several excellent systems available that will enable you to easily keep track of your mandates, deposits, rental payments, lease details and renewal dates, maintenance requirements and the profitability of your rental book. Some will even enable you to run credit and tenant history checks on potential tenants and generate standard lease and other documents that are regularly updated and fully legally compliant.

Reward any of your own team members who bring in new rental business

If one of your agents has just sold an investment property to a landlord and persuaded them to let your company manage it, you should have a system in place to reward their hard work. You should also ensure that your sales staff always have your rental management marketing material on hand so that no opportunity is missed.

Advertise your rental listings everywhere

Use local noticeboards and smaller newspapers as well as the classifieds in bigger papers and online property portals. Mr Rademeyer adds that agents should not forget to work on their own website so that when tenants (and landlords) visit, it is attractive and easy for them to find the information they require, especially your contact details. “These days, it is also increasingly important to ensure that your site is mobile-friendly because most people now access the internet via their smartphones.”

First-time buyers urged to act soon to secure a home loan

The average home price paid by first-time buyers has risen by a modest R37 000 in the past 12 months, but the average home loan installment has increased by almost R700 a month. This is despite the fact that buyers are paying much bigger deposits than they did a year ago.

“This represents a clear decline in affordability for first-time buyers. We believe potential first-time buyers should make a decision about buying property as soon as possible, because it is going to become increasingly difficult for them to become homeowners in the next 12 to 18 months, even if there are no further interest rate increases,” says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator.*

Interest rate hikes cause larger repayments even with larger deposits

“Our latest statistics show that while the average first-time buyer home price has risen by 5,7% in the past 12 months, the average deposits paid by such buyers (as a percentage of purchase price) has risen from 11,1% to 12,3%, taking the actual rand amount of the average deposit in this sector from R79 000 to R92 000.”

Intuitively, he notes, one would expect this to have lowered the average monthly bond repayment for first-time buyers, “but unfortunately, there were also three interest rate increases in the past 12 months which caused the variable home loan rate to move from 9,5% to 10,5%, and the result has been an increase of almost R700 in the average instalment.”

Larger household incomes needed to secure home loans

“At the same time home prices have continued to rise, albeit slowly, and at this stage are set to keep rising, especially now that South Africa has escaped a rating downgrade, and consumer and business confidence is starting to rise again.”

“This means that prospective buyers are going to need bigger household incomes to qualify for home loans in the coming months. As it is now, the average first-time buyer who pays a deposit requires a household after-tax income of at least R22 000 a month to qualify. This is almost 13% more than was needed a year ago, and most people are not getting salary increases of this magnitude in the current economic climate.”

What is more, says Mr. Rademeyer, even if they did, it might not be enough. “The rising costs of food, transport, electricity and other necessities have really eaten into household disposable incomes in the past year, leaving many aspirant buyers without savings and without sufficient discretionary income to afford a monthly home loan repayment in terms of the National Credit Act.”

“In addition, SA consumers have been warned that they will be paying more tax in 2017, while banks are likely to apply even stricter credit granting criteria in the light of the rising unemployment numbers and the increased risk of default.”

Potential home buyers should not wait to buy

The clear message, he says, is that first-time buyers should not wait any longer to make the leap into home ownership, even if they have to downscale their aspirations and buy a smaller, less expensive home to start with. “And by the looks of things, many people have got it, or are being prompted to consider it as rentals continue to rise across the board.”

“Our figures show that while repeat buyers are still in the majority, the percentage of home loan applications submitted by first-time buyers has risen slightly in the past 12 months, although due to the decline in affordability the percentage of home loans granted to such buyers has remained constant at around 35% of the total.”

Household austerity measures essential

Mr Rademeyer notes that for those who are still preparing to buy, there will really only be one way to counter declining affordability in the coming months, which will be to aggressively lower household debt levels by cutting spending to the bone and diverting every spare rand into paying off high-interest store and credit card balances, vehicle loans and above all, any personal loans, as soon as possible.

“After that, buyers who want to give themselves the best chance of being approved for a home loan really should apply through a reputable mortgage originator such as BetterLife Home Loans, because we are currently still able to secure approvals for 72% of all the applications we submit to the banks, while the general rate of approval is only one in three applications.”

*The BetterLife Home Loans statistics represent 25% of all residential mortgage bonds being registered in the Deeds Office and are thus a reliable indicator of the state of South Africa’s residential property market.




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Save energy and boost your deposit savings

With summer around the corner, it’s important to note that winter is not the only time that utility bills can increase.

Summertime can mean that you feel the need to run air conditioners or fans almost constantly, for example, and that you need to use more water in the garden, take more showers and run the pool pump more hours a day.

All of these factors can leave you with much less money in your monthly budget – so if you’re trying to save for a deposit to buy a home, these energy-saving measures are worth implementing.

Implement the following measures over the next few months:

  1. Keep window shades, blinds, curtains or drapes closed to block out sunlight during the hottest part of the day.
  2. Set your air conditioning to 22 or 23 degrees when you’re at home, and off when you are not. If you want to walk into a cool home, use smart technology to turn the system on about 15 minutes before you arrive.
  3. Move lamps, TVs and any other heat sources away from air conditioners to prevent them from affecting the thermostat and causing the unit to run longer than necessary.
  4. Keep furniture and other obstacles away from the front of central air conditioning ducts so that the cooler air can circulate freely.
  5. Keep your air conditioner units and ceiling fans well maintained.
  6. Switch off any fans at night or when you’re not at home to save electricity.
  7. Whenever possible, use a microwave to cook your meals instead of using a traditional electric oven or stove.
  8. Make sure that your appliances are Energy Star.
  9. Keep unused rooms closed off from the rest of the house.
  10. Wherever you can, replace incandescent light bulbs with fluorescent lamps or LEDs.
  11. Keep the fridge doors shut as much as possible and avoid placing hot items inside to cool.
  12. Store bottles of tap water to drink in the fridge to reduce running water use.
  13. Water the garden at night or during the coolest part of the day and, if possible, use borehole water.
  14. Dry your laundry outdoors instead of using a tumble dryer.

If you are already a home-owner, you can make even further savings:

  1. Take advantage of the summer rains and invest in a rainwater tank.
  2. Use a shade net or grow plants in your garden to shield your home or windows from the heat.
  3. Install dimmer switches or timers where appropriate. Turn off all lights that are not in use.
  4. Take advantage of the hot sun and install some solar panels or a solar-powered geyser to save energy.
  5. If you have a pool, keep it covered when not in use to reduce evaporation and avoid having to refill it too often.

Why prospecting must be a priority

Everyone knows that in real estate, the agent with the stock is the agent who succeeds in tough times – and yet prospecting for new business so often gets put on the back burner because it is viewed as the hardest part of the job.

Here are some expert tips to ensure that prospecting becomes as regular a part of your day as brushing your teeth – so you can build a business pipeline guaranteed to deliver success, no matter what the economy is doing:

Don’t get complacent

Just because you are busy now does not mean that you should ever stop prospecting for new business. Agents who do create a difficult road for themselves, with many stops and starts, as sales spurts are followed by weeks and even months of no income until they have found some more homes to sell.

Rather make peace with the task of constant prospecting and devoting some time to it every day and you will have a much less stressful life in the long run. In addition, you will build up your sales record and reputation much more quickly, and that will make prospecting that bit easier.

Schedule prospecting time

Prospecting is not something you should be fitting in around other, “more important” tasks. Schedule a block of time to do it every single day and don’t be tempted to give up this time for something else or skip it “just for today”. Consider it just as important as meeting a buyer or a seller, and try to book it for when you are feeling most energized and able to give it your best effort. Sometimes this will be early morning and sometimes this will be later in the day but stick to it and you will soon see how it leads to more sales and a steady income stream.

Don’t worry about things you can’t control

People might not be at home when you call, and some will naturally respond negatively to your approach. Don’t let these experiences put you off or get you down – just keep moving forward and focusing on finding opportunities to offer your service and solve people’s problems. The very next person you talk to might be itching to buy a new home, or have the perfect property for sale to match the needs of the buyer who called you yesterday.

In other words, you should not spend your time worrying about the conditions on the playing field. Just get out there and play, every day and without fail. This will put you in charge of your business, your work schedule and most of all, your income. It’ll free you from a lot of the worry that others have when the economy slumps.

6 ways to spend your bonus better

Thirteen is an unlucky number for some – but not for those who get a year-end “thirteenth cheque”, and certainly not for those who can resist the impulse to spend this bonus all at once.

“There are several great things you can do with a bonus that will help you feel wealthier all year round,” says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator, “The most important of these is to reduce your debt, especially any debt that carries a high interest rate.”

“For example, do a quick calculation and add up just the interest you paid on your credit card this past year. This is how much you could save in the coming year by eliminating the outstanding balance – and using at least part of your bonus to get a head start on that goal.”

Other ways to use a bonus to improve your financial future, he says, include the following:

1. The “envelope strategy”

Make sure to stick to your budget for festive season spending. Decide with your family what you are going to spend on gifts and entertainment, and allocate an exact amount, or “envelope”, for each occasion or person. Of course it isn’t practical to go shopping with actual envelopes full of cash, but having a very detailed list – and specific plans for the rest of your bonus – will help you stay on track.

You can also separate your festive season money from the rest of your money into a special electronic wallet or debit card account and leave your credit and store cards at home. For the adults and even teens on your list, consider gift vouchers for the specific amount you have allocated which they can use or put towards buying exactly what they want.

2. Save for January

You can stop this from being the longest, most miserable month of the year by putting aside some of your bonus to cover those extra costs we all tend to forget about in December. These might include school fees, uniforms and start-of-the-year items such as bags, shoes and stationery; medial aid and insurance premium increases; annual licence fees and subscription renewals as well as any additional bills or credit card charges that you did incur over the festive season.

3. Open a savings account

If your budget is free of high-interest debt, use at least some of your bonus to open a “rainy day” account – and set up a debit order to add to it every month. This is the account that will help you weather unexpected home and car repair costs, medical or family emergencies, and insurance excess payments, without derailing your household budget or racking up new credit card debt.

4. Advance your home ownership plan

If you are working towards buying your own home, boost your deposit savings with at least part of your bonus. The bigger deposit you can pay, the more likely you are to be approved for a home loan – and the smaller your monthly repayments will be.

5. Reduce the capital portion of your home loan

If you are already a homeowner, a good option is to use your bonus – or at least part of it – to repaying your home loan. This could benefit you all year with a lower monthly instalment. Alternatively, if you keep your instalments the same, you can pay your home off faster and potentially save several years’ worth of interest.

6. Increase the value of your home

You may not be planning to sell your home right now, but using some of your bonus to improve the exterior appearance, the security measures or the garden at today’s prices could translate into significant savings – and a quicker sale – when it is time to go. And in the meanwhile, it will make it a delightful place to spend more holiday seasons with your family.

Repeat buyers paying home deposits of more than 40%

The average purchase price paid by SA homebuyers has increased 8,6% over the past 12 months to reach R1,08m at the end of October 2016, according to the latest statistics released by BetterLife Home Loans, SA’s biggest mortgage originator*.

“These figures also show that the size of the average home loan approved increased 4,6% during this period to R842 000,” says CEO Shaun Rademeyer, “That means that the average deposit that homebuyers elected to pay also increased, to just under R240 000 or about 22% of the purchase price.”

“This is underlined by a substantial increase over the past 12 months in the percentage of bonds granted for 70% or less of the property value, with the balance of the purchase price being paid in cash.”

Boom in big home loan deposits

“Our statistics show that there has been a 6,7% increase during this period in the percentage of bonds going to buyers who have paid a deposit equal to 30 or 40% of the property’s value, and a 9,4% increase in the percentage of home loans being granted to those who have paid a deposit of more than 40%.”

Not surprisingly, he says, these changes correspond to large increases over the past 12 months in the percentage of bonds being granted in the higher purchase price categories. There has been a 7% increase, for example, in the R1m to R1,5m purchase price category, a 14% increase in the R1,5m to R2,5m category and a 19% increase in the over-R2,5m bracket.

“Generally, we observe that buyers in these price ranges are repeat buyers who are utilizing most of the equity they have built up in an existing home to assist them in the purchase of their next property. Their usual aim in putting down such sizeable deposits is to secure a favourable interest rate and keep their monthly home loan installments down, but we also regard it as a positive sign for the property market that they are prepared to commit large amounts of their own cash to long-term investments in South Africa.”

100% mortgage applicants turned away

Meanwhile, says Mr Rademeyer, there has been a significant 2,8% decline in the percentage of home loans granted for 100% of the home purchase price (usually available only to buyers in the affordable home category) and a 5% decline in the percentage of loans granted to those paying a deposit of 10% or less.

“These numbers correspond to a 3% decline in the percentage of bonds granted in the R500 000 to R1m purchase price category, a 9% decline in the R250 000 to R500 000 category and an 18% decline in the under-R250 000 category.”

Demand from first-time home buyers remains strong

These price ranges are those in which first-time buyers are most active, and reflect the increasing difficulty these buyers are now having in gaining access to the market, he says. “But, to be clear, there is no lack of demand from first-time buyers – in fact, the percentage of applications we receive from first-timers has been on a rising trend for the past year. The problem is that many of them have too much debt at the moment to enable them to save large deposits, and that means that they can’t bring their monthly bond installments within their affordability limits. Consequently, only 35% of all the home loans granted are currently going to first-time buyers.”

The BetterLife statistics show that the average purchase price paid by first-time buyers has risen 5% over the past 12 months to R740 000, while the size of the average home loan approved has increased by almost 4% to R650 000. The average deposit currently being paid in this sector is thus around R90 000, or 12% of the purchase price.

Mr Rademeyer adds that all buyers can improve their chance of being approved for a home loan by applying through a reputable mortgage originator such as BetterLife Home Loans. “Currently, those who apply on their own only have a 34% chance of success, while we are still able to secure approvals for 72% of all applications that we submit by preparing and motivating them correctly.”

*The BetterLife Home Loans statistics represent 25% of all residential mortgage bonds being registered in the Deeds Office.





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Check your mortgage rate before you buy-to-let

When you buy a property with the intention of letting it out and eventually earning an income from it, the banks will most likely only approve the home loan you need at a higher rate of interest than you qualified for on your primary residence.

In addition, they may require you to put down a 20% or 25% deposit before they will consider financing the purchase at all, says Shaun Rademeyer, CEO of BetterLife Home Loans, SA’s biggest mortgage originator.

“Many homeowners who are planning to buy a second property as an investment – or even just to rent out until they retire – make the assumption that because they are already a ‘known quantity’ with a good track record of home loan repayment, they will be able to secure a home loan for this purchase on the same terms as the loan granted to buy their current residence.”

“However, even if the second property is in an area that the lender also considers a ‘good risk’, they will usually be quoted a higher interest rate, and very often asked for a substantial deposit.”

And they should not be offended, he says, because this actually has nothing to do with their credit record or previous behaviour as a borrower. “The banks are just well aware after years of experience that if a borrower ever runs into financial difficulty, he is much more likely to default on the loan used to buy an investment property or a holiday home than on the loan used to purchase the roof over his head.”

“In fact, this happened en masse during the 2008/09 recession, and the property market in many coastal towns is still recovering from the glut of repossessed holiday homes and flats.”

In short, says Rademeyer, investment property or second home purchases represent more risk for the lender – and more risk will always be offset by higher rates, or more collateral, or both.

“What is more, if the lender believes that the repayments on the home loan used to finance the investment property will be heavily dependent on the buyer actually receiving rental income from that property, the interest rate quoted might be even higher.”

“Consequently, if you want to negotiate a lower rate on a buy-to-let purchase or your retirement home, your best bet is to be able to show that you can comfortably afford the repayments on the new property in addition to your current commitments – and irrespective of whether you receive rental income or not.”

And that, he says, is probably a prudent provision to make anyway, as is the payment of the biggest deposit you can afford, because it means that you will be less at risk if a tenant defaults or if interest rates rise as they are doing currently.