Buy-to-Let the preserve of the wealthy? Not in Oswestry
“Buy-to-let is a key entrepreneurial activity in the
UK. It enables those bold enough to take
the leap to supplement their income or to move away from employment altogether
and become financially free. But such a
decision should not be taken lightly and more recently the government has tried
to deter would-be landlords in a bid to help first-time buyers onto the
property ladder.
“Anyone buying a British property since April this year with
the intention of letting it out has had to pay an additional three percent of
the purchase price in stamp duty.
“Yes the stamp duty hike will affect the south of the
country with property prices spiralling ever higher, but here in Oswestry, you
can easily purchase a two bedroom buy-to-let home for under the £125,000
threshold. Making stamp duty just 3%,
compared with properties over £250,000 for which you’d pay a whopping 8%.
“Success in the buy-to-let market is reliant on doing the
research - know your area and know your rental values. Would-be landlord entrepreneurs – and
existing ones – should not be put off by some of the headlines, because even
the potential for dents in profits has done little to dampen the appetite of
buyers.
“The term ‘safe as houses’ applies well here - property is a
tangible asset and people like an investment that they can touch. Rents are going up and demand for rental
properties is still strong. It still
makes sense - even for someone who isn’t an investment expert - to put their
money into property.
“Cuts to the tax relief landlords can claim on mortgage
interest payments, due to be phased in from next year, is also expected to have
little effect. Apart from the people who
buy rental property in cash or inherit property and decide to become landlords,
Bank of England research shows that two-thirds of landlords with a buy-to-let
mortgage are basic rate tax payers, meaning only a very small minority of
landlords on higher rates would be affected by the restrictions.
“As anyone with a basic understanding of economics will be
able to work out, where demand is high, supply will follow. Whatever penalties the authorities try to put
on landlord investors, the fact remains – there’s a profit to be made on
buy-to-let. British house prices have become detached from incomes and demand
for rental properties is here to stay.”
