When the Chancellor announced a stamp duty holiday during the pandemic, he hoped it would offer a boost to the property market. His plan worked, with people up and down the country deciding it was the perfect time to invest in buy-to-let property.
Before the pandemic, buy-to-let properties were predominantly bought by those earning a living from letting property, but in recent months first time landlords have been investing in buy-to-let property and applying and securing mortgages to help them complete the purchase.
Money lenders have been keen to offer buy-to-let mortgages and have been willing to cater for first time landlords. However, fixed rates have risen year on year, which is the result of lenders having to take into account the risk factor when making their offers.
But despite this, the market for rental property is booming and experts point to a number of factors for the demand in rental properties. Firstly, house price inflation, along with low savings rates, have made saving for a deposit challenging, and on top of this the pandemic has also given rise to job insecurity and lower income, making people more cautious and less likely to want to, or be able to invest in, their own property.
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Holiday lets
For landlords looking to offer short term lets in holiday destinations, the pandemic may have resulted in a huge loss of income last year, but 2021 looks like a bumper year for staycations, with many UK hotels and holiday resorts reporting a surge in interest since the Prime Minister announced the most recent exit plan for the national lockdown.
Need to know
Rules and regulations have changed in recent years and anyone looking to invest in a buy-to-let property needs to understand the implications of the rules and seek impartial advice on the best way to buy and manage any properties they decide to buy.
Before buying buy-to-let properties, landlords are advised to get a building survey London to check the property is a good investment and won’t throw up any nasty surprises. building survey London have been allowed to continue during the pandemic and these are easy to arrange.
The market
A few years ago over 60% of buy-to-let properties were cash purchases, but in 2020 cash purchases accounted for only half of all purchases, with landlords willing to take on mortgages in order to be able to enter the rental market. One of the reasons for this is cheaper borrowing costs being available, along with property being seen as a secure investment and, therefore, low risk.
The rental sector saw its peak in 2017 but when tax and property ownership regulations changed many people were put off, resulting in fewer rental properties being available. But now low interest rates and the stamp duty holiday has seen a new rise in first time landlords, many who have no experience in the property market but see it as an opportunity for secure and regular income.
