Fri 19 Jan 2018 View all news articles

A guide to buy-to-let in 2018

The buy-to-let sector has remained resilient in the face of tax and regulatory changes, with the latest figures revealing that monthly sales increased by 10.8% in November 2017, as landlords and investors continue to adapt their portfolios – and business models – to take the new rules into account.

For example, there has been a reported increase in the numbers buying through limited companies, in response to the stamp duty changes, as well as growth in regional investment as buyers seek out up-and-coming rental hotspots.

While we may see fewer new landlords coming into the market in 2018, from what we’ve seen over the past 18 months we envisage that those who already have property portfolios are unlikely to exit the market. With the ongoing shortage of housing in the UK and a buoyant rental market, property remains a popular choice with many investors, and it’s also important that there is enough quality rental accommodation available in the private sector to meet the growing demand.

Northern powerhouse cities such as Manchester, Liverpool and Leeds proved popular for buy-
to-let investors in 2017, alongside Birmingham and Leicester in the Midlands. Investors in 2018 will this year be looking to smaller towns such as Wakefield or Doncaster, where property tends to be cheaper and potentially attract higher yields.

One specialist lender discovered that the number of landlords filling out applications under a limited company had jumped to 70% last year from 45% in 2016. Other innovative property investors are seeking to transform former office buildings into rental units under permitted development rules, allowing them to transform disused commercial buildings for residential use.

New guidelines mean that some landlords and property investors may find it more difficult to access finance on the high street, but specialist buy-to-let finance providers – such as Together – are constantly looking at ways to improve and innovate our products to help these customers as they adapt. As a result, we’re seeing continuing strong demand for finance in both the buy-to-let and auction markets.

Source: Bridging & Commercial

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