Are Buy To Let UK Properties a Good Investment?
In the days when mortgage rates were lower and rental yields were higher, buy to let in the UK was seen as the fast track to prosperity.
However, the tax changes brought in by the government in the last few years have made turning a decent profit a little less straightforward. Having said this, it’s still absolutely possible if you know what you’re doing.
To help you out, here are a few points to consider in order to make good money by buying a property to let in the UK.
Recent Changes For Landlords
Stamp Duty For Buy To Let
We’ll get the bad news out of the way first! The first change brought in by the government that you may not expect as a new landlord is a three percent additional charge for stamp duty. This was introduced back in 2016, and applies to any property that isn’t your primary residence.
Make sure that you factor this into your calculations when working out your potential returns.
No More Offsetting Rental Income Against Tax Bill
In the past, some landlords offset ten percent of their rental income against their tax bill. This reflected the cost of repairs to the property caused by wear and tear. Unfortunately, you’re no longer able to do this, which could obviously negatively affect your profit margins.
Additional Tax Relief Abolished
Landlords can still get a tax credit for 20 percent of their mortgage interest payments. However, this is less generous than the system that was in place prior to April 2020. It goes without saying that if you can buy without a mortgage then this won’t affect you.
To find out more about tax changes that could affect you as a landlord, visit the government website.
Good News For Would-Be Landlords
On a more positive note, UK rents are expected to climb by a massive 15 percent by 2023, as the demand rises for rental properties.
This means that although the tax changes may have made it a little more difficult for landlords, you can still turn a decent profit with the right property in the right location.
Speaking of which, it’s important not to underestimate the difference a great location will make to your return on investment. You can still make an excellent return as a buy to let landlord as long as you’re savvy about where you invest.
Best Locations For Buy To Let Properties
Locations with high student populations have been shown to offer some of the highest rental yields.
Take Liverpool, for example. Home to three universities and a whopping 70,000 students, six of its postcodes were listed in the top 25 best buy to let areas in 2018. The highest of these was L7, which delivered an average rental yield of 9.79 percent.
Choosing which area to invest in will depend on the type of property you’d like to buy. This could be apartments for professionals, family homes or student accommodation.
Take a look at some of our buy to let properties in UK locations that are highly likely to deliver an excellent return on investment.
Halifax House, Liverpool City Centre
Comprising 26 luxury apartments, this prime city centre accommodation is arranged over three of the four floors. The ground floor of this grade II listed building houses a stylish bar and restaurant.
A mixture of studio, one and two-bedroom apartments and duplexes, each apartment has a homely feel and highly refined specifications.
A new build development located east of central Nottingham, comprising 22 luxury one and two-bedroom apartments, with allocated parking. You’ll have to be quick to get your hands on one of these though, we have only two remaining!
Arden Gate, Central Birmingham
Located in the heart of the UK’s second city, Arden Gate comprises 225 luxury apartments finished with meticulous attention to detail. From bespoke kitchens, to tasteful living areas and stylish bathrooms, these apartments are designed to provide the ultimate combination of space, comfort and elegance.
To speak to us about any of our buy to let properties in the UK, give us a call on 0333 303 4767 or send us a message today.
