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Residential buy-to-Let

A year on from buy-to-let tax changes – what has happened to the market?

Author: Staff





It’s now been more than a year since the government announced significant changes to the UK’s buy-to-let sector, with the introduction of a new three per cent stamp duty levy one of the most contentious developments to impact landlords in recent years.

The move was expected to have far-reaching repercussions for the buy-to-let market as a whole and now, a year later, we can fully appreciate the extent of this decision. Overall, many expected the market to falter in the face of rising financial pressures, but has this been the case?

Record landlord numbers seen this year

Despite what many feared would be a blow to UK landlords, the latest figures published by London-focused estate agent Ludlow Thompson have revealed the number of active landlords across the country has grown by 27 per cent during the past five years – with sustained growth in 2017.

Moreover, the estate agent announced a fifth consecutive year of growth in the average number of buy-to-let properties contained within each landlord’s property portfolio – rising to 1.8 properties in the last 12 months.

Far from hindering the market, the introduction of the government’s tax changes seems to have supported growth in the sector, with the chairman of Ludlow Thompson Stephen Ludlow optimistic that further positivity will be seen in the future.

He told the Independent: “The long-term picture for the buy-to-let market remains strong.

“Even taking into account the implementation of government changes to buy-to-let tax relief, there are a number of tax reliefs available to landlords.”

Indeed, the future continues to be bright for the UK’s buy-to-let landlords, with several segments of the market outperforming the rest at present. Now really is an exciting time for investors to consider the benefits of the buy-to-let space.

Student property is gaining attraction

One such area of burgeoning growth is student-specific property, with landlords witnessing increasing returns and improved yields in many parts of the country during recent months.

Figures published by Knight Frank have shown how private sector investment now dominates the development of purpose-built student accommodation across the UK, with more than 23,000 new beds to be added to the market in the 2018/19 academic year.

With such strong performance at present and sustained demand due to rising student numbers, more new entrants to the buy-to-let sector are expected (and needed) in the years ahead.

The benefits of zero stamp duty to pay, the option of cash-only purchases and a lower entry level for investment than the traditional residential sector have all helped to boost the attractiveness of student-specific buy-to-let investment of late.

At Experience Invest, we’ve witnessed the popularity of student-specific developments ourselves, with some of the most in-demand projects that we currently offer access to including Opto Student Newcastle and Baltic 56, among others.

Indeed, student property can now be viewed as being among the top asset classes for property investment in the UK, with high demand helping to create assured returns for investors for the foreseeable future.

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