Investing is simple, but not easy.
Warren Buffett
It has recently been revealed that many real estate professionals who have already invested in the UK, confirming their confidence in the UK real estate market despite the uncertainty stemming from Brexit, are considering expanding their property portfolios in 2019. In fact, the economic benefits from property investments continue to outweigh alternative investment options.
So, if you are considering to build your buy-to-let portfolio in 2019, here’s a list of top things to keep in mind:
- Despite “Brexit” phenomenon, mortgage interest rates remain low, offering investors a wide range of alternatives to choose from.
- Although property prices have declined compared to the peak of 2018, sellers can still count on a considerable profit margin, so we are facing a real win-win situation. This creates the ideal conditions for potential investors, who can begin their buy-to-let journey with the utmost confidence and with large potential profit margins.
- The demand for rental properties is higher than ever, but availability remains insufficient compared to the request. Invest in the right area and you will surely have no problem attracting tenants and obtaining a very interesting economic return.
WHAT ABOUT BREXIT?
Many sources suggest that a lower migration from Europe will result in a lower demand for rented accommodation in the United Kingdom. Surprisingly, the reality is totally different. High property prices continue to be inaccessible for many, making more and more Britons prefer to rent. This, combined with the continuous shortage of rental properties, continuously increases the rent prices and demand. All of this, of course, is of a great benefit to investors.
The number of British tenants who choose to rent rather than buy their own home continues to increase, as many of them prefer to enjoy the flexibility offered by renting. Graduates, for example, tend to stay in rented property after completing their studies, as they do not want to take on the financial responsibility of a mortgage at the beginning of their career.
With such high demand for rental properties, there is no doubt that the rental market is the one to bet on.
It seems that the government’s strategy is working. In fact, a significant number of owners and investors abandoned the buy-to-let market last year. Also in 2017, many real estate agencies reported an increase in owners willing to sell. So what’s the good news?
With numerous owners who have decided to abandon the buy-to-let market, the demand for remaining rental properties has had a great surge, meaning that many landlords are benefiting from even more interest in their properties, and as a result they are getting even greater rents.
Ultimately, it is not Brexit that represents the biggest risk for the rental market, but government intervention, so it is advisable that both investors and tenants are always up to date on progress in the real estate market. However, with investors who can benefit from interest rates close to all-time low, and incentives for tenants such as Leaders “No Deposit Option” that helps tenants to enter the rental market, there continues to be enormous convenience to invest in buy-to-let regardless of the current Brexit negotiations.
WHAT MT Finance e HMR&C SAY
MT Finance has reported that over 80% of real estate investors expect to grow their portfolios during this year, with less than 20% claiming they do not think about another purchase. Out of the 80% expected to increase their portfolios, just over half reported that they are looking to buy in the South East, considering this area one of the most interesting to invest in the UK.
In addition to this, HMRC have revealed that stamp duty transactions have decreased by nearly £1 billion over the past year, confirming that the UK property market has indeed seen a reduction in high-value purchase transactions. As a result, house prices have begun to settle after the recent peak. Further data confirming that this is an ideal time for investors who plan to build or expand property portfolios in 2019.
IN CONCLUSION THE WORDS OF Managing Director OF Lettings for Leaders.
The reassurance that many UK property professionals, already invested in the rental market, are planning on building their portfolios – despite our current economic and political challenges – really is great news for the future of the rental market. It should act as comfort to any landlords currently sitting on the fence when thinking of buying more property this year,
comments Allison Thompson, Managing Director of Lettings for Leaders.
IT’S TIME TO INVEST