Buy to Let: Investing for the Future

Still remaining popular with those investors who like the familiarity of bricks and mortar, the size of the private rented sector in England has more than doubled over the course of the past 20 years. The sheer demand for rental properties in our major cities far outweighs the supply, which in turn has caused a very welcome uptick in rental yields.

Despite these positive facts, feelings towards buy to let investments differ greatly depending on who you speak to. A growing weight of legislation, associated costs and a series of tax raids has stopped some landlords from investing further. 

In this blog, we point out a few facts that show why the rental sector is still the right place for your investment.

Mortgages and Tax  

Despite the phasing out of the stamp duty holiday earlier this year, BTL lender Paragon reported that lending was up by a third between 1 October to 30 June against the same period in 2020. With application levels going strong, the lender stated that this was thanks to “heightened levels of market-wide transactions.” 

The huge increase in buy-to-let mortgage products available to investors has meant that borrowing is as cheap as ever. Moneyfacts reported around 2700 different BTL products available in the Summer, with some Landlords even being able to remortgage for less when coming to the end of their 2 year fixed rate. 

A strong sign for future things to come!

The futures bright, the futures green

The Government’s continued commitment to bring all new tenancies in the privately rented sector to EPC Band C by 2028 means that many tenants now look into how eco-friendly a building is when looking at their next home.

It’s not just tenants who need to take this into consideration; both future buy-to-let investors and current landlords alike should also take more notice of environmental factors when considering their purchase. 

So called “green mortgages” could be on offer to Landlords who invest in energy efficient properties. These products will offer lower interest rates to investors with a more environmentally friendly mindset.

Attract more tenants and save money whilst doing your bit to save the planet? Why not!

Generation rent

Empty properties cost money and void periods can be expensive for Landlords. But with homeownership levels falling, data provided by Goodlord shows that in July 2021, voids on average across England were at their lowest level since August 2019.

Even with the average rental price in London sitting at an astonishing £1600 per month, around a third of tenants expect to actually move into their new home in less than two weeks after they first make contact with an agent. 

Tenants also wish to stay in their rented properties for longer, most extending their initial term to 24 months or more. Not only do longer term tenancies offer security to Tenants, but the  Government is also considering plans to incentivise Landlords who offer long term commitments. 

Demand for long term commitment is high and we see no sign of it slowing anytime soon.

To gain more advice about becoming a landlord, or to speak to us about your current investments, talk to our team of property experts today.

https://www.keatons.com/contact/