Is it still a good time to be a landlord?

March 31, 2021Categories: Landlords
Couple sat at the kitchen double reading

The short answer is yes! Here are 5 good reasons for continuing or starting to invest in property:

1. The rental market is still strong across much of the UK

Despite the pandemic, demand and rents have continued to rise across most of the UK.

With every micro-market being slightly different, it’s important to focus on what’s happening in your own particular area for your specific rental. Get in touch with your nearest Your Move branch to find out the latest local market changes.

2. Save on tax when you buy before the end of September

With the extension of the Stamp Duty holiday, if you buy a property in England for under £500,000 and complete on the purchase before 1st July, you’ll only pay the 3% additional property tax. Between July and September, the same applies but up to the value of £250,000.

3. Property has proved to be resilient through an economic downturn

While many businesses and incomes across the UK have taken a huge hit during the pandemic, the property market overall has continued to thrive, in contrast to previous economic downturns. With people forced to be separate from each other and spending more time in their homes, landlords have played a valuable role in providing much-needed housing.

4. Property has continued to deliver returns

It’s been proved overtime, that, for many investors, property can give good returns through rental profits and capital growth. And the benefit you get from leverage, through taking out a Buy to Let mortgage, is a key reason property can sometimes outperform other types of financial investment.

Here’s a simple example is:

  • You invest £200k in shares. If the market increases by 5%, you’ve made £10,000. That’s a 5% return on your capital.
     
  • Now split that £200k across two properties worth £200k, taking a 50% mortgage on each. That gives you £400k worth of assets so, when the market increases by 5%, you’ve made £20,000 – a 10% return on your £200k investment.
     
  • And you’ve also got monthly rental profits on top of the capital growth returns!

    Of course, there are associated costs to consider, such as purchase costs, getting the property ready to rent, management and ongoing maintenance costs. But, even taking all that into account, property can still provide investors and landlords with good returns.

5. You can build in equity when you buy

If you can buy a property at less than its true market value and refurbish by carrying out cost-effective improvements, you can end up with a property that’s increased in value by more than it cost you to do the work. That capital growth can help increase rental returns and act as a good cushion against any market fluctuations.

If you would like to find out more about becoming a landlord of have any questions, contact your local lettings expert who will be more than happy to discuss your lettings requirements with you.

 


 

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Embrace Financial Services usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.

Is your property achieving the best rent? Book a rental valuation and find out