Wed 29 Nov 2017 View all news articles

Buy to let - a recap of 2017

We’re now nearing the end of the year and since we’ll soon be entering 2018, it’s important to look back at what has occurred over the last 12 months in the world of property.

We’ve had a fair few challenges throughout 2017 and with the aftermath of referendums and government changes no doubt leaving many investors wondering what the future may hold, we thought we’d take a look at what’s in-store.

Here’s our take on the market changes and how this may have an effect on buy to let:

- Tax regulations: There are a number of changes that have been brought into play over the last few years which most buy to let investors will already be familiar with. Whist this is no longer ‘new news’ to those investing in property, as the regulations have been in-play since 2016, there has been speculation as to how this could alter the level of buy to let activity. From what we’ve seen at Sequre, there are very few landlords that have been deterred by the tax changes - our average new enquiry levels still sit at between 4,500 and 5,000 a month. Savvy investors who have heightened their due diligence and invest in the right property types and locations are still clearly reaping the rewards of investing in buy to let property.  

- A changing economy: It’s been an eventful year with a number of major political shake-ups. Brexit and the snap election took place within less than 12 months of each other and this initially led to a high level of speculation as to how this would change the UK as a whole. As the dust has settled, we’re yet to see any huge changes that are likely to effect the buy to let market further. As the economy stabilises, we’re seeing a strengthening pound and a government that’s determined to see thousands more homes built over the next few years. The shortage of land is still a hurdle and we’re a long way off addressing the supply vs demand imbalance for UK property. The reliance on the private rental sector is here to stay, which is great news for buy to let investors. 

- Mortgages and interest rates: Only in the last few months have we seen any real significant changes to the market for landlords; one being the rise of the Bank of England’s base rate, and the other is the new regulations for landlords with 4 or more properties.  They may only be very recent changes, but the base rate has been expected for a number of months, having been at record lows for a number of years. The slight rise of only 0.25% shouldn’t have a huge effect on those looking to take out mortgages for the next few months, but it’s certainly something to keep an eye on in the future.

Why property is still the number one investment

- Rising house prices: According to ONS, we’re seeing an annual rise of 5.4% a year
- Prominent locations: Areas of the North West tend to generate both higher yields as well as significant capital growth. Entry levels are often much lower too.
- A proven track record: Buy to let has been proven to consistently outperform other investment types such as stocks, bonds and ISAs.
- More new homes on the way: The government have promised to deliver 1 million homes by 2020

It’s important to keep abreast of any new laws and regulations that could potentially affect your property investments. Seeking advice from professional outlets and weighing up your options is the best course of action. . If you’re looking for a safe investment for your future, buy to let has proven to deliver the best returns time and time again. 

Source: Property Reporter

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