A Piece of EnglandA UK buy to let property blog |
|
Stay informed |
Keep up to date with the Piece of England newsletter covering news and views from the UK property market
|
A Piece of EnglandA UK buy to let property blog |
|
Stay informed |
Keep up to date with the Piece of England newsletter covering news and views from the UK property market
|
With interest rates on the rise, rampant inflation and a possible recession looming, can now really be a good time to invest in buy to let property? Buy to let investment peaked in 2016. Since then, the number of landlords has declined by around 10%, largely driven by changes in income tax and stamp duty. Last year there was an uptick, attributed to the stamp duty holiday. However, the trend continued into 2022, with Q1 showing the highest number of buy to let purchases in the last six years. It seems that this may continue into Q2, with "first time landlord" being the most searched term on Knowledge Bank, a tool used by brokers to find suitable mortgages. The income tax change is still with us, as is the second home stamp duty surcharge and the premium levied on overseas purchasers. So why the renewed interest? Strong rental marketThe pandemic surge in house prices has been matched by the strength of the rental market. The national average annual increase in the price of new tenancies is above 10%, in many places much more. Even in London, where yields are historically low, properties are once again becoming viable on a cash flow basis. House prices rarely go downOver the last sixty years, house prices have gone down in just eight. The number of ten year periods is exactly zero. Only twice have there been consecutive years of falls - 1991/2/3 (Sterling exit from the ERM) and 2008/9 (Global Financial Crisis). Each time, recovery was fairly swift and prices went on to new highs. Property as an inflation hedge
|
20/6/2022