x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

It is now a good time to invest in buy-to-let - UK Property Finance

Buy-to-let remains a popular investment option for many investors, despite being the subject of major reform over the last three years.

A raft of government tax hikes has had an adverse impact on the sector, which largely explains why fewer people are investing in the buy-to-let sector, but the aftermath of the pandemic could prompt a change. 

“Whether you are considering your first buy-to-let venture or looking to expand your existing portfolio, the aftermath of the Covid-19 pandemic could be quite beneficial for some,” said Craig Upton, marketing director of UK Property Finance. 

The latest data from Halifax shows that average property values rose by 1.6%, or £3,770, month-on-month in July, while rents increased 1.5% last month when compared with June, according to Homelet.

Looking on an annual basis, 10 of the 12 regions monitored by HomeLet showed an increase in rental values between July 2019 and July 2020, with two of those regions seeing a rise of more than 4.5%.

With property experts across the UK are expecting a vast wave of pent up demand from renters to be released over the coming weeks and months, there appears to be plenty of room for growth in rental values 

Upton continued: “Those unable to move due to mandatory lockdown and business closures are now free to put their plans into action, which could see demand for rental properties soar and average rents spike as a result.

“It’s also widely predicted that impaired job prospects and economic uncertainty for many will drive up demand for rental properties. It’s likely to be some time before the British public have the financial confidence needed to make major purchase decisions, further increasing demand for rental properties.

“All of this is likely to be compounded by the difficulties many will encounter in both raising the funds necessary to qualify for a mortgage and getting their applications approved by major lenders.”

Poll: Is now a good time to invest in buy-to-let property?

PLACE YOUR VOTE BELOW

  • icon

    "It is now a good time to invest in buy-to-let" (your headline) sounds like a definitive statement. However the truth is that no-one can ever predict property prices. The statement is from someone involved in property who may have a vested interest in property prices rising - i.e. hardly independent.
    A better headline might have been "One person involved in property predicts a rise in property prices but he may be completely wrong of course" - but it's not so snappy as a headline. So how about "People don't know the future of property prices" - one can't go wrong with that, but it's hardly a startling headline.

    Joanna Gibbings

    BTL is not just about property prices.
    It is as much about interest rates and rental demand.
    These may fluctuate independently giving compensating benefits.
    They are also difficult to predict, but investment is about calculated risk.

     
    icon

    Joanna - Very well put. If the numbers add up a property can be a BTL at any point in the cycle although I think more fluctuations to come.

     
  • Paul Barrett

    The last thing LL should be doing is investing more.
    Financial resilience is the name of the game.

    Leveraging at more than can be afforded by LHA rates is a risk too far.

    If I was to remain a LL that is what I would be doing.

    LL must surely realise that there is no more calculated risk.
    If your tenant stops paying rent for WHATEVER reason and you can't get rid of them there is NO calculated risk

    The risk is immediately real!

    The CV19 crisis has revealed to many leveraged LL how vulnerable they are.

    A LL has to get it right everytime.
    One rent defaulting tenant could bankrupt a LL.

    The idea that BTL can continue the same old way is for the birds.
    Of course there will be many chancer LL continuing the same old way.
    Their choice of the risk.

    Sensible LL will reduce business risk.
    This can only be achieved by substantially reducing leverage
    RGI even where possible no longer seems to protect LL due to exclusion of certain causes like a pandemic.
    That makes it pointless.
    If LL wish to guarantee income preservation then they need to reduce leverage that LHA can afford.

    The calculated risk strategy no longer works.

    The risks will occur so LL need to ensure their business is resilient to these.

    There are still far too many rental properties available.

    The threat to capital values remain.
    LL would do well to offload as much as they can to reduce leverage on other properties.

    With all the additional cost burdens that LL have experienced and will experience the BTL proposition no longer adds up.

    Resilience is the name of the game.
    Tough if it means fewer rental properties available.

    LL need to plan for survival NOT expansion!


  • icon

    Why would we buy when we can't rent what we have. They have been chipping away at us for years until they destroyed us and themselves, caused recession which was always going to be the outcome regardless of Corona. Who are they going to attack next they certainly won't be doing anything productive themselves, they life revolves around knocking others as a cover of how useless they are themselves.
    Building thousands of Flats, over priced, clearly not required but it is understandable to buy time to stop the economy collapsing altogether and Developers from going bust leaving Buildings / Blocks of Flats half finished all over the place, with so many job losses how can anyone buy them not alone pay rent. Government had no option other than proceed to try and tie things over short term anyhow.

  • Paul Barrett

    Govt will eventually buy these properties you mention as social housing.
    Mind you if HK kicks off there will be 3 million Hong Kongers filling them up!!!

    Perhaps Govt regards the empty flats as a strategic reserve!?

    Only LL who have supreme confidence in themselves NEVER to acquire a rent defaulting tenant will expand or retain their existing business.

    Personally I consider I'm not a perfect LL and will not continue to risk bankruptcy.

    Govt hasn't finished with BTL LL yet.

    Rent controls
    Eviction process made even more difficult
    Forcing LL to take DSS tenants.
    Reduction in capital values if rent controls enforced.

    Far too many negatives to remain a leveraged LL

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up