Property Investment: Four things to keep in mind in 2017
Last year (2016) was certainly an unpredictable year for the property market. While the media hype may have initially dampened spirits, buy to let property investment still remains as one of the top performing asset classes. Despite the stamp duty changes, market fluctuations and Brexit, the market is continuing to flourish. Here are 4 things to keep in mind:
1) Property prices are still rising
While the likes of Brexit and a new government may have stirred up some concern across the UK in 2016, property prices are continuing to rise, as predicted. There is still a supply and demand issue throughout the UK and until the supply issue is addressed, the demand will be there for the foreseeable. New research from the Halifax has shown that house prices rose by as much as £4,000 by the end of December following on from Brexit – a clear sign that there aren’t any indications of a housing crisis on the horizon.
It’s true that London and other areas of the South are seeing house prices slow down or even drop slightly, but this really comes as no great surprise to anyone who has monitored the capital’s sky-rocketing prices for the last few years; it’s unsustainable and for investors, buy to let property in these areas don’t make financial sense when you consider the capital growth and high yields which can be achieved in other areas of the UK.
2) North is more prosperous than ever
While London property may be flailing, there really never has been a better time to invest in the North. For years now, it has continually proven itself as the best in terms of rental yields for landlords, and property prices are generally much more affordable. Major cities such as Manchester, Liverpool and Leeds are grabbing the attention of investors all over the UK. Cities like this can provide much better returns than many other areas and will continue to see high levels of tenant demand; this creates a greater need for property, something that the overcrowded capital just can’t compete with any longer.
3) Stamp duty won’t affect savvy investors
It’s been over a year since the announcement was made about stamp duty rates increasing on those planning to purchase a second property. While the changes only came into play in April 2016, it hasn’t deterred investors when purchasing buy to let properties.
Our own research has highlighted that Sequre investors are able to understand that the small extra costs incurred when buying a second property will be nominal once compared to the returns they are set to gain from the property long-term. Once again, this particularly applies when buying property in the North as the cost of a property will be lower than other areas of the UK, resulting in the stamp duty rates also being relatively low.
4) Keeping on top of finances is key
There are many tricks of the trade you can learn as a landlord which can result in you increasing your profit and decreasing your overheads, not to mention the savvy ways in which you can grow your property portfolio.
One area of importance is tax efficiency and an awareness of your current financial situation which will allow you to be much smarter when investing. For example, many investors choose to purchase their buy to let properties outright with cash, which is no issue at all. However, many landlords choose to split their cash deposits by using a buy to let mortgage, which can see them use the same amount of money they would buy for one property, and split it into deposits for several properties. This allows investors to benefit from the rental income and capital growth from more than one property, while only having to pay back the minimum amount of interest needed.
Make the most out of your property investment and contact Sequre today for all your buy to let needs. Our dedicated team of property consultants are on hand to guide you through the buying process, from your very first enquiry right up to completing your purchase. To find out more, call us on 0800 011 2277.