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BTL landlords continue to benefit from ‘healthy capital growth and high yields’

Investment in buy-to-let continues to outperform most major asset classes, at a time of low saving rates and stock market volatility.

Despite the government’s decision to introduce a number of measures to curb the growth of buy-to-let landlords, many people believe that buy-to-let remains an attractive income investment. 

The introduction of higher stamp duty purchasing costs, the scrapping of the wear and tear allowance, the phasing out of landlords’ mortgage interest tax relief, and the fact that the average rental yield in the UK has eased, has not deterred many experienced buy-to-let investors as the returns from the returns routinely outperform those of other investments, thanks in part to capital growth, as reflected by the latest Halifax property price index.

The newly released house price figures suggest a housing market in remarkably good health, but low supply levels continue to distort the real picture.

The UK’s largest mortgage lender said that home prices increased by 3.9% in the year to the end of November, down from 4.5% in October.

According to the Halifax, the average residential property in the UK is now selling for £226,821.

“The overall increase of 3.9% year on year clearly demonstrates the stability of the UK market, particularly at a time of economic uncertainty,” said Graham Davidson, managing director of Sequre Property Investment. 

Whilst many outlets are reporting a slowdown of investment activity, this is not reflective of what Sequence is currently seeing in the marketplace.

The buy-to-let specialist added: “Buy-to-let investors are still benefiting from healthy capital growth and high yields, despite the numerous tax changes and new legislations introduced. This is something we feel will continue into 2018 as landlords prop up the rental sector due to the shortage of housing accommodation.

“Those who invest wisely can still benefit hugely from a buoyant market over the next 12 months.”

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