If you’ve been thinking about investing in a buy-to-let, but have never managed to take the plunge, read on. Here’s our top five reasons why we (and our happy customers) think now is a great time to be investing in the London buy-to-let market.
1. Stamp duty increase in April 2016
The proposed three per cent increase in stamp duty for buy-to-lets is unlikely to deter would-be landlords. In fact, some of our clients would have recouped the tax in the first three months of their investment last year. That said, it’s better to avoid it if you can. By instructing us now, you can have your buy-to-let investments sown up before the tax changes come in.
2. Supplement your pension
Did you know that at current annuity rates, you would have to save £500,000 in a pension to receive a £25-£30k annual (taxable) income in retirement? You’re likely to live around 30 years in retirement, so it’s worth ensuring you don’t have all of your eggs in one basket.
3. Paying for school fees
One of our clients recently invested in a buy-to-let in order to save for school fees. The flat he bought was £400,000. At a relatively conservative 5% assumed annual growth rate over 10 years, the property could be worth over £650,000 in 10 years’ time, giving him more than enough to finance his daughter through secondary education.
4. You don’t have to be cash rich
Almost of all of our clients re-mortgage their residential property to raise a deposit and cover fees, and then use a buy-to-let mortgage to fund the rest. The rent they achieve more than covers the extra payments on their residential mortgage and the buy-to-let mortgage, meaning there is no impact on their day-to-day expenses.
5. It’s simple supply and demand economics
According to The Office for National Statistics, London’s population is set to rise by 13 per cent over the next decade, hitting nearly 9.4 million by 2022. At the same time, London has an acute under-supply of housing. 42,000 new homes are needed each year and only 26,000 homes were built during 2014 (Source: London School of Economics, Jan 2015). These forecasts are exerting increased pressure on London’s housing stock which is fuelling house price inflation.
I’ve worked with a number of clients in 2015, all of whom gave MPC the opportunity to source, buy and manage a buy-to-let on their behalf. Here is what some of them had to say about us http://myproperty-consultant.london/testimonials/
If you want to know more, please contact me. I’m happy to give you a no-obligation assessment. Or if you know anyone who is interested in buy-to-let, please pass them my details.
In the meantime, all the best for 2016!