Property market update – UK buy to let analysis
We’ve seen a fair few changes to the property investment market in just a few short years. There have been a number of new laws and economic changes and it’s important to recognise what affect this has had on the UK property market, especially for buy to let investors in particular.
Many buy to let investors are now aware of the changes to tax that have been in place since 2016 – the stamp duty surcharge for second homes as well as changes to mortgage tax relief. More recently, we’ve also seen lenders implement new underwriting processes specifically for portfolio landlords. While some of this news came as somewhat of a shock initially, nearly 18 months later we are still experiencing a buoyant market; house prices are rising at an average of 5% year on year, rents are increasing across the UK and rental demand from tenants remains at an all-time-high.
We have seen many cases fighting for a reversal of the new laws since they came into play. With the Budget announcement scheduled for later this month, it is thought that we could see a revision as petitions and new initiatives have brought some new ideas to fruition for the new government. Whether this happens or not could potentially affect the property market, but given the current level of activity we would have no cause for concern if it were to remain the same.
Within the last two years, Britain has seen not only a major change in terms of a European Referendum, but also a snap election less than 12 months later. It’s no surprise this activity caused some concern as to how the market would fair, and what this would mean for the UK in general as well as the property market.
Now that the dust has settled and the outcome of Brexit and the Election has become clearer, we know that while certain aspects remain unknown, the property market has remained stable throughout this process, when many predicted that it wouldn’t. Buy to let has proved itself as a healthy and sustainable investment option. The buy to let market is healthy – it was the case before Brexit, and it is still the case following on from the election. Those who do their due diligence will still benefit from a strengthening property market and reap the financial rewards by investing in the right areas.
Supply and demand
A housing shortage across the UK has naturally led to a surge in house prices and buyer demand is through the roof. With 189,000 new homes* built in the last year, the government is attempting to deliver the homes needed to meet the necessary demands of the public, but there’s no doubt that more could be done.
Private developers are playing their part in creating new homes, particularly within the PRS. In Manchester alone, there are 71 developments** currently under construction across the city, equating to a total of over 12,000 individual new homes. If this level of home-building continues, we can remain positive that the housing supply will soon catch up with the level of demand.
At Sequre, the demand for buy to let property remains. Our team receive thousands of enquiries every month from new and established investors looking for buy to let property. It’s understandable that today’s investors would be more vigilant in a market that has seen a range of changes in recent times, and while being cautious is understandable, investors who have been delaying their buy to let investment could end up paying more further down the line. Capital growth is soaring in key cities such as Manchester, Liverpool and Leeds which is why so many investors are taking advantage now.
If you’d like to find out more about investing in buy to let property, contact our team today. At Sequre, we make your journey into the world of buy to let simple – we can recommend solicitors, mortgage brokers and letting agents, so you have a complete end to end process where all the hard work is done for you. Our hassle-free approach is the reason our clients come back to us again and again for their buy to let purchase. To find out more, call us on 0800 011 2277.
*source – gov.uk
**source – urbinfomanc.com