6 March 2017
Investing in buy to let property has, previously, been both easy and lucrative however with the introduction in April 2016 of the 3% stamp duty surcharge on additional properties and the pending tax changes, buy to let will no longer deliver the returns that it used to; yet investment in the buy to let sector continues to increase as people would rather invest in property than shares and savings.
The plans to stop tax relief on buy to let mortgage interest is expected to result in a hike in rent for tenants, as landlords, attempt to recoup increased costs. Reports that some landlords will sell investment properties will add further imbalance to the supply and demand of accommodation, also driving up rents. Recent research from buy to let lender Kent Reliance suggest a third of landlord expect to increase rents in the next 6 months by an average of 5.4% - this equates to almost £50 per month.
Renting offers flexibility and the large deposit requirement to purchase property also restricts many from buying and therefore forces them into private rented accommodation; this keeps the demand for rented accommodation high.
Kate West, Divisional Lettings Director, reports, ‘This will offer great encouragement to those thinking about investing in buy to let property for the first time as well as existing landlords looking to expand their current portfolio’
Should you wish to discuss investing in the buy to let market for the first time or expanding your current portfolio please call Kate to discuss in more detail.