26 July 2017
You would have had to have been living under a rock to not know about the Government’s recent tax attacks on buy-to-let landlords. But there are still positives of property investment in 2017…
If you’re considering a new property investment, either to start off your portfolio or expand an existing stock of properties, you may have been put off by higher Stamp Duty rates and the reduction in tax relief on finance costs for buy-to-let landlords. The important thing to remember, however, is that property investment still has many positives, even in 2017!
Award-winning Landlord Insurance provider Just Landlords has put together its top reasons to invest in property this year:
Low mortgage rates
It couldn’t be a better time to take out a mortgage, as interest rates are currently sitting at rock-bottom figures and lenders are fighting to keep their deals as competitive as possible. If your plan is to invest in property using a buy-to-let mortgage, you’ll also benefit from the wide range of products available on the market, as banks and specialist lenders tap into growing demand in the sector.
With interest rates looking more likely to rise than fall in the near future, it’s time to secure one of the great deals available.
High tenant demand
Although these low mortgage rates, combined with new schemes from the Government, are making it easier for struggling first time buyers to get onto the property ladder, sky-high deposit requirements are still preventing many taking their first steps. This means that the private rental sector continues to experience soaring levels of demand from tenants.
The higher the demand in the market, the more likely your property will get let quickly and to good tenants.
Rising rent prices
As with house prices, the latest rent price figures look like they could go no higher, but they always seem to manage it. If rents keep going up, you will be able to justify higher prices on your properties, which will boost your monthly rental income and overall yields.
With demand so high in the sector, it doesn’t look like prices will be coming down anytime soon – but remember to buy in a thriving rental market.
Diverse investment options
Choosing property as your investment option doesn’t need to be restricting – there are plenty of different property types and opportunities to consider. Within the private rental sector, there is now a host of different tenants that you could target, such as young professionals, students and families, while Houses in Multiple Occupation (HMOs) or purpose-built Build to Rent are also popular choices.
As the market continues to grow and develop, a wide range of investment options will keep opening up, so the sky really is the limit.
Unlike other investments, property is typically an incredibly long-term option. This means that you can hold a solid investment for a long period, which will boost your returns when it comes to selling or releasing equity on your asset.
And with house prices only going one way, it appears that property will continue delivering strong returns.
Steady income stream
One of the biggest positives of property investment is that it provides a steady income stream, in the form of weekly or monthly rental payments. This means that you not only benefit from the overall capital appreciation on your asset, but also receive a regular income stream, which can be used to cover mortgage repayments, maintenance and letting agent fees.
However, Just Landlords warns that you should protect your rental income against rent arrears, which can damage your own finances as an investor. Its Rent Guarantee Insurance ensures you still get paid if your tenant can’t: https://www.justlandlords.co.uk/rentguaranteeinsurance
Although all news relating to the buy-to-let sector seems to have been negative of late, there are still positives surrounding property investment in 2017 – we hope you find them and invest wisely!
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