The Ins and Outs of buy-to-let property in 2020.
Investing in buy-to-let property has been a popular investment opportunity pursued by many, with currently 1.5 million landlords registered in England. With a growing demand for rental properties as first-time buyers struggle to make the first step onto the property ladder, investing in buy-to-let property is a clever business move. There is potential for fantastic returns in investing in buy-to-let property and it is still a popular financial move many are considering. However, with the uncertainty surrounding Brexit and politics in its current state, the property market has reacted showing fluctuations and an overall reduction in growth rate, especially in London and the South. So, how financially viable is it to invest in a buy-to-let property? Well, this blog is going to explore that very question.
What does the buy-to-let property market say?
As mentioned, the property market in the UK at the moment is witnessing a period of slowing in growth as uncertainty around Brexit continues. The UK property market is currently a tale of two stories; the vast majority of the UK is witnessing a sustained period of growth, even if it has slowed slightly. On the other hand, property in London has fallen in value, with the expected potential capital gains from investment dropping significantly.
Furthermore, the changes made by governments since 2015 have looked to create a market more favourable to homeowners than landlords. With an increase in stamp duty, and a scaling back of tax relief on buy-to-let mortgage payments, coupled with low growth rates, many landlords have decided to sell up and pursue alternative investment options. While the market isn’t as friendly as it used to be for investors, a multitude of industry experts still coney positivity for those looking to invest.
Changes to stamp Duty?
The Stamp Duty holiday also applies to buy-to-let and second home purchases, but landlords and investors will still have pay the 3% surcharge at all levels of purchase, including those below £500,000. Although a 3% tax is still required, the announcement by the Chancellor has made it dramatically cheaper for investors to increase their property portfolio and increase the available potential return on investment.
How does this benefit landlords and Investors?
To gain the full benefit of Rishi Sunak’s stamp duty holiday, experts and buy-to-let brokers are recommending investors to buy quickly before the best properties are taken and new investors enter the market.
It is widely accepted that landlords need to take advantage of the stamp duty holiday before the window closes at the end of March next year. During this temporary holiday, landlords and investors will have increased access to properties that may be out of their original price range or increase their budget for their preferred property type.
Is there any positivity?
The answer is YES.
While it may seem all doom and gloom, there is still a considerable amount of support in favour of buy-to-let property investment. The simple answer is people are still looking for property to live in. As many first-time and second-time buyers are being priced out of the market, the demand for rental property is increasing alongside high average rents.
Although success in buy-to-let property can be heavily influenced by external economic and political factors, the main proportion of success is still determined by the work of the investor. Whilst property prices and tax relief on mortgages are not as friendly as they once were, buy-to-let property investment can still provide considerable returns. Through choosing the correct property in the best location, there will still be substantial demand for property if it is valued correctly and is finished to the best possible standard.
Significant and well-thought research, with the advice of experts, can provide potentials landlords with significant potential returns.
How can NEPI help?
NEPI offer landlords and investors with bespoke investment opportunities in the buy-to-let market across the North East of England. NEPI is proud to provide investment opportunities for investors with varying budgets and needs.
For a full list of properties on offer NEPI, please do not hesitate to contact a member of our team today or you can see our extensive list of properties here.
2 South Terrace