27th Feb, 2018
Buy-to-let has been viewed as an easy and straightforward investment for years, with landlords reaping the benefits of both capital growth and significant monthly income.
However, fast-forward to 2018 and the renting landscape has changed considerably. The recent three percent stamp duty surcharge and change in tax regulation factors are just some of the elements putting pressure on landlords.
To add to these developments, growth is expected throughout the year within the built to rent (BTR) property sector – an emerging sub-market within the private residential market, in which housing is designed specifically for renting rather than for sale. With tightening profit margins for landlords and the possibility of large-scale commercial BTR home developments, this could result in buy-to-let being overtaken by this new scheme.
Yet the adaptability of the letting sector has proven that it is not a dying trade. In 2016 the tax changes were a jolt to the system, but there is evidence that the industry has absorbed this shock and has slowly started to bounce back. The shortage in supply of homes has resulted in demand for properties being strong, which is ensuring that rent can stay high enough for landlords to cover their costs and more.
If you’re an existing landlord or looking to invest within the market, it may be a great idea to look north. Manchester ranked the highest in rental yields of 5.55% and a rental growth of 5.76% in 2017, according to LendInvest’s rankings. Similarly, the Royal Institution of Chartered Surveyors (RICS) UK Residential Market Survey revealed that there was a 15% reported rise in demand from buyers in Yorkshire and the Humber at the start of the year.
When letting out a home or buying to rent, thoroughly researching the property market is key. Once you have done this, you will have a clearer idea of what to expect.
Buy-to-let is a long game and can be a successful one for those who are patient, willing to do their research, can budget well and are happy to become hands-on landlords. It’s certainly looking like there are promising times ahead for savvy investors in 2018!
If you’re on the hunt for the perfect property to rent out, feel free to contact one of our helpful team members here.
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