A buy-to-let property is an investment someone makes on a property with the expectation of receiving a profit when it is sold.
An investor typically buys a property that is available for immediate use and rents the property until they choose to sell it. Investors utilise buy-to-let properties to earn a short-term income through rent and long-term income which they receive upon selling the property. Let’s look more closely at the details of investing in a buy-to-let property.
Reason for rise in buy-to-let demand
Since the last few years, there has been a rapid growth in the demand for buy-to-let properties. Research indicates that from 2015 to 2020, the number of landlords who invested in a buy-to-let property went up by 49% from 1.8 million to 2.7 million. Stamp duty holiday and affordable mortgage interest rates have caused many landlords to purchase buy-to-let properties as a stable investment option. The buy-to-let market continued to provide a more reliable return on investment for landlords through the pandemic when other forms of investments went through a period of instability.
In addition, the rental market witnessed growth last year with landlords witnessing a rapid decrease in time that it took to rent a property. Career uncertainties posed by the COVID-19 pandemic caused more people to stick to renting rather than investing in a house. Also, owning a house was deemed less of a priority considering the type of living space, amenities, and proximity to social places that rental properties continue to offer.
Raising capital for buy-to-let
There are many reasons why investing in a buy-to-let property is beneficial to boost your income. However, it can be challenging to finance a property and pay for the deposit, legal fees, and any refurbishment costs. To overcome these challenges, there are several ways in which you can raise capital to meet these costs.
Buy-to-let investors looking to expand their portfolios have been handed a boost, with lenders launching more than 200 new deals this last month.
If you are 55 years old and have a pension plan, you can withdraw funds from your pension account and use it for investing in your property. You may also choose to buy a property jointly with someone else to help pay for the purchase costs. You can split profit on the basis of how much cash each one of you is investing in the venture.
Buy-to-let in London
London is one of the top choices for landlords interested in buy-to-let properties. Studies suggest that in 2020, the average landlord in Landlord who owned their buy-to-let property for an average of 10 years sold it for 71% more than the initial price. The gross gain per landlord rose by 4% for the first time in more than five years. Further, someone with more than a 15-year ownership of their buy-to-let accommodation gained thrice more in profit over a landlord who owned theirs for no more than four years. Such statistics indicate stability for any landlord who is interested in owning a buy-to-let property in London. The historic resilience of residential property means many private investors are still looking to add to their assets and bearing in mind the impact of the pandemic it is worth considering the re-purposing of a property to meet the changing needs of tenants. With people spending more time at home, having extra space both in and outdoors has become more important than ever.
As a landlord, if you would like more information about letting properties in London, consider connecting with Nationwide Accommodation Services (naccs). Naccs, can help you with getting a secured rental income and assistance with a turnkey solution. Turnkey solutions offer properties that are not quite up to the regulation standards, a new lease of life. If your buy-to-let requires some updating to meet regulations before letting, we can assist in ensuring your property is compliant to all required standards. Our dedicated staff and partners will make your property market-ready. Find out more at https://www.naccs.co.uk/. You can also email email@example.com call (+44) 0203 095 0954.
Our latest blog articles
New provisional figures from HM Revenue & Customs estimate UK residential transactions in January of 121,640. That is 24.1% higher than a year ear...
Rishi Sunak is reportedly preparing to extend the stamp duty holiday which is due to end next month until the end of June. Rishi Sunak is repo...