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BTL landlords are ‘a dying breed ‘, warns investment firm

Buy-to-let landlords are being driven out of the private rented sector and will soon start looking for more profitable alternative investments.

That is the view of Reece Mennie, CEO of Hunter Jones, a city based investment firm that specialises in introducing clients to potentially high returning property investment opportunities.

The company recently produced a whitepaper entitled ‘A Smarter Alternative to Buy-to-Let’ that shows some individuals could have received almost a three times greater return by investing in property bonds, compared to investing in bricks and mortar through buy-to-let properties.

“Aside from it being a somewhat more attractive offering, this stat clearly signals the not so bright future of buy-to-let, providing a strong indication that landlords could well become a dying breed in years to come,” said Mennie.

Tax, legislative and regulatory changes introduced in recent years have deterred some buy-to-let investors in recent years, and that largely explains why the number of landlords has now fallen by an estimated 120,000 over the last three years.

Mennie continued: “These changes mean that only the larger, professional players are able to cope, as they can benefit from their scale of operation, whereas the average person looking to invest in individual BTLs, or HMOs, will have a much tougher job.

“Stalling Brexit negotiations have also thrown a spanner in the works with many people uncertain about domestic property investment due to the current worry over the future of the UK economy.

“Due to this, the alternative investments sector has experienced exponential growth, as more sophisticated and self-certified investors realise the potential for greater returns from property bonds compared to directly investing in bricks and mortar through buy-to-let.”

Mennie believes that property bonds are growing increasingly more popular with investors, especially given that they can, according to the investment analyst, “generate some of the most impressive returns currently available, and at relatively low risk”.

Mennie added: “The market is moving away from traditional buy-to-let, with major capital investors and property specialists realising the potential of property bonds.

“Unlike buy-to-let, investing into property bonds can also be a far simpler and hassle-free process, making for an easier and safer investment.

“Some of the stressful factors that you would typically have to address when investing directly into the buy-to-let property market, including council tax, estate agents, tenancy challenges, stamp duty and maintenance fees are also not applicable with property bonds, increasing their appeal.”

  • icon

    Property bonds - the new timeshare? You pay real money but don't actually own a real physical asset, although your investment yield will be reduced by maintenance costs over which you have no control.

  • Paul Barrett

    Absolute twaddle about these Property Bonds.
    All BTL LL need to do is sell their BTL properties and buy a residential property or convert a BTL mortgage to a residential.
    You can have as many residential properties as you like if you can afford them.
    Lodgers may be taken on.
    Then NO S24 etc.
    Unencumbered residential properties can have 4 lodgers to avoid Mandatory HMO Licensing.
    So for example a BTL LL can sell 4 of his 5 BTL properties converting the fifth property to a residential property either mortgaged or unencumbered.
    Then use the lodger strategy.
    The yield will be the same with CG only now possible with a second residential property.
    But without the stupid S24 reducing yields.
    Tenants wouldn't be concerned at all if they were converted to lodgers.
    The RFRA may be used for whichever the LL nominates as his PPR.
    No law can force him to be in constant occupation of his PPR.
    Once a month is all that is required to meet residential insurance requirements.
    Property Bonds complete waste of time.
    Lodger strategy beats Property Bonds everytime.






  • icon

    Not for me thank you, i buy and own out right my investments, sounds old fashioned ? well it's always worked for me.

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