Buy to let still an attractive option

AT HUNTERS we’ve seen an increase in rents across the region, as landlords look to tenants to recoup some costs resulting from changes to legislation including the three per cent stamp duty charge for additional properties and the removal of tax relief on mortgage interest for higher rate tax payers.

These new regulations have obviously had an effect on the buy to let market and nationally buy to let landlords borrowing has fallen by 22 per cent year on year. The Royal Institute of Chartered Surveyors (RICS) estimates that this has resulted in a shortfall of 1.8 million properties across the UK. A shortage of supply in suitable properties to rent has had the effect of pushing up rents, its simple demand pull economics. As tenants compete for limited properties rents look set to continue to rise by over inflation rates of three per cent or more.

Despite this, Richard Mace at Hunters thinks buy to lets are still a good option for investors. With interest rates at all-time lows, landlords can still expect returns significantly higher than those achievable at high street banks and building societies. Many people now have access to pension savings and are able to draw down up to 25 per cent in a tax free lump sum. A buy to let offers a good longer term option and remains the preferred choice with potential asset growth as well as regular rental income returns. We think the long-term future is bright as the private rented sector plays a major role in the UK’s housing market supplying much needed quality accommodation for families to rent. We hope the Government will look to support future landlords who provide this vital role.

At Hunters we provide advice on buy to let properties, landlord mortgage advice and offer our clients a complete lettings service set into two main categories where potential landlords can decide which suits their needs best, either fully managed or tenant introduction. For more information telephone 01453 542395.