It’s been a turbulent couple of years for buy-to-let and with landlords becoming the governments’ scapegoat for the ongoing UK housing crisis, investors have been bombarded with new barriers and tax rises, intended to slow the market.
However, despite a slowdown in buy-to-let activity earlier this year, it seems that the tide is already turning again. Rightmove.co.uk have reported this week that buyer enquiries from potential landlords and investors are now up 30% since May 2016. The key reason for the lull in landlord interest during the spring was thought to be a result of a new stamp duty premium of 3% on all buy-to-let property purchases.
Rents also appear to now be on the increase again, with a 0.5% rise reported for the quarter (Rightmove.co.uk), bringing the average UK rental up to £779 per month.
So, for the new investor considering a move into buy-to-let for the first time, is there still an opportunity to make it pay?
A two bedroom, semi-detached house in Evesham (ideal buy-to-let) can be purchased for around £150,000 and Johnsons Property Consultants would confidently expect to achieve a rental of £650 per month.
Stamp Duty (including the 3% buy-to-let premium) on the purchase would equal £5,000. You may well be lucky enough to negotiate this additional upfront cost off the purchase price. However, assuming that this increases the cost of your investment to £155,000, your gross return is still 5% pa.
With tenant demand at a high in Evesham and interest rates at a record low, buy-to-let continues to offer bank beating returns for your money. If you would like to find out more about buy-to-let in Evesham, Pershore, Redditch, Worcester or the Cotswolds, get in touch today for a no obligation chat.