As many of you are aware, the UK has entered its first recession in 11 years, which has caused hesitation when it comes to buying a property to let. There is uncertainty and risk. However, now could be the best time to invest, and here are 6 reasons why;
1. It provides a second source of income
There is a lot of uncertainty at the moment, so buying a property with the intention to let it out would be a great idea to give you a second source of income.
In order to get a good rental income, you must choose the property carefully. Look out for location, its proximity to schools, shops, parks, etc, whether or not it has good parking/ a garage, if there is a garden or yard, and other aspects of the house like the number of bedrooms and bathrooms, and whether there is a conservatory.
2. Tenant demand has increased
Tenant demand grew by 33% in March 2020, in comparison with March 2019. This means that there will definitely be a market for rental properties, so it will be a profitable move.
If you manage to buy a good, well-located rental property and keep up to date with all landlord requirements, 2020 is a good year for you to invest.
3. Stamp Duty leniency
We’ve spoken about this Stamp Duty holiday previously, and you can read more about what it is here.
With the Stamp Duty holiday in England and Northern Ireland granting reduced rates on first home purchases and slightly less-reduced rates on second homes, it makes for another great reason to invest. As a buy-to-let landlord, you have to pay an additional 3% on the reduced rates, so the rates work out as follows;
- A property of lower value than £500,000 =3%
- A property of value in between £500,001- £925,000 = 8%
- A property valued between £925,001-£1.5 million = 13%
- If the property if worth more than £1.5 million = 15%
This is still a reduced rate compared to previous taxes, so make the most of it whilst it lasts!
4. Security in the long-term
Buying a property to let is a long-term investment, and is perfect for those who are looking to invest, but are unsure about stocks and shares. Buying property is risky, but there are great advantages, such as rental yield and equipping yourself with long-term financial security.
5. Mortgage sector changes
There is a large amount of positive movement in the mortgage sector, with many more options becoming available, meaning that those looking to buy-to-let have more borrowing options. There are now 1,735 mortgage options for landlords, so you can find something that suits you and allows you to save.
In addition to an increase in mortgage options, the rates are becoming more competitive, which is a great incentive to anyone trying to get on the property ladder.
6. Government ‘Insulation Scheme’
In a bid to reduce carbon emissions and become net zero by 2050, the UK government has released a £2 billion insulation scheme as part of a larger project. What does this mean for homeowners? Homeowners will receive financial incentives in the form of vouchers of up to £5,000 to go towards energy-saving improvements in their homes. These vouchers will include energy-efficient installation of insulation, solar panels, and air source heat pumps, alongside other things.
Both homeowners and landlords can apply for this grant, and reap the benefits of becoming a green property, some of which include boosting the value of the property when selling or letting.
Whether you're an experienced landlord, it's your first-time letting, or you’re simply looking for more information, you can trust our expert Lettings team to give you the best support. Get in touch with our team today.