Ever since changes to Buy-to-Let stamp duty were introduced two and a half years ago, the news has been buzzing with stories about investment properties – would they remain as popular as before? Would the extra 3% duty placed on buy-to-let landlords put people off?
This question became even more pressing when mortgage interest tax relief began to be phased out last year, leading to yet more expense for investors.
And now, the latest report by the Ministry of Housing has suggested that Buy-to-Let property figures are in decline for the first time since 1988, with about 4,000 properties being sold off each month.
So, has the Buy-to-Let bubble burst?
Hardly. If we look into the matter further, it really becomes a question of location, location, location.
Experts argue that some former Buy-to-Let hotspots are becoming un-investable, with our capital city being a prime example. Jatin Ondhia, CEO of Shojin Property Partners, explains that landlords are: ‘facing poor buy-to-let yields especially in London for example, where they are between just 2-3%, while nationwide the average yields are between 6–8%’.
This is a result of high property prices combined with increasing rates of tax for those buying second properties, which are starting to make investment out of reach in some southern areas especially.
But, at the same time, data from Private Finance has shown that cities like Nottingham, Edinburgh, Liverpool and our very own Manchester remain competitive and attractive for property investment.
It seems that the relatively large populations of students and young professionals in these areas keep the rentals market buoyant – and it looks unlikely that this trend will change any time soon.
Indeed, we at Julie Twist Properties continue to see significant interest from investors in our sales stock, and our rentals market is always struggling to keep up with demand. When it comes to snapping up a rental property, potential tenants really have to be on their toes to secure the place that they want – and the local market has been that way for many years.
Even more interestingly, despite fears of further landlord taxation, the Chancellor’s latest Budget (and the last before Brexit D-Day) has left the private rentals sector untouched, showing that the Government has put a welcome halt to more charges for landlords – at least for the time being.
So, if you are wondering about whether or not property investment is right for you, rather than wondering if, perhaps the bigger question is where – and it seems that, as we always recommend, you’re best off looking North!
Julie Twist Properties’ range of sales stock is all available to browse online here.
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