In April 2016, new tax measures went into effect which were designed to curtail UK buy-to-let activity, imposing higher operating costs on landlords. It appears as though reports concerning the death of the UK’s buy-to-let sector have been greatly exaggerated, new data suggests.
Buy-to-let landlords are now “staging a fight back against government efforts to rein in” the market.
The introduction of specialist buy to let mortgages in 1996, made it easier for people to become private landlords. According to the Telegraph by 2014, one in five UK homes were owned by private landlords, with this figure expected to increase to one in three by 2032, exacerbating the UK’s ongoing housing shortage. The UK’s property supply is rising, with the number of new homes available climbing by 41% in August 2016, but even now, there is a strong shortage, forcing more people to rent rather than buy.
Investors can accrue strong returns from buy-to-let. Some markets are more lucrative for buy-to-let investors, with recently released data indicating that renting to students can provide significant returns, writes Richard Carr.
Changing British market
The Guardian writes that buy-to-let investors earned average returns of 1,400% from 1996, when specialist buy-to-let mortgages were first introduced, until the end of 2014. However according to What Mortgage, the British government has recently introduced a number of measures which could make buy-to-let a less profitable investment strategy for UK-based investors.
But a study conducted by property crowdfunding firm Property Partner indicates that letting property to students can still prove lucrative. Buy-to-let investor interest in this market usually crests at this point in the year, as students are moving through the housing system before starting university, providing landlords with many opportunities to attract tenants. Continue reading →