Another day and another paper. And another articles which spells out DOOM and GLOOM for the housing sector. This time it's a "woe is me" for buy to let investors. Increased taxation, stamp duty surcharges and so on and so on. There's no money in Buy to Let if you read (and believe) all the journalists have to offer. I can't comment on the brilliance (or perhaps lack of) of the journalism itself, I certainly beg to differ.
Many of my savvier client landlords are currently rushing into the market with enthusiasm. Speaking to one of my bigger clients he exclaimed "I'm completing on two this week, find me another two, quick, before 1st April!"
He's not alone. If you read the article you'll see that many investors are rushing to get their savings; after all a deal will have to be 3% better in a few months for it to be worth the same to an investor.
A push from the government to push stock towards end user buyers as opposed to property traders. A push to perhaps slow the market? Personal thoughts are that rents will rise. Buy to let still remains a solid investment vehicle and the increased purchase costs will simply have a negative effect on "investment ripe" properties; think the probates and the doer uppers of the world. The reduction of mortgage interest deduction from the tax bill will certainly be a steady driver of rents (in the upward direction of course).
I certainly feel that long-term, it will not have an adverse effect on investors. This presents new opportunities as small-fry (accidental and otherwise) landlords leave the market. If you are a well-informed landlord and have help from the professionals around you (most advice is available free of charge, all you have to do is ask) there should be no reason NOT to invest more in to buy to let. You will certainly get a good capital growth, but buy well and you can replace your salary within 2 years.
A client of mine recently purchased a three bedroom property for 380k, refurbished for 25k and it was revalued at 500k! He's refinancing this one also, so in 6 months time he will withdraw £90k from the property, which was returning £3000pcm. Not bad for a £30,000 investment. Can you make 120% yield off an ISA, stock, bond, or share? I think not.
If you are thinking of investing (further) in the South London property market pick up the phone or drop me a line on jeroen@claphampropertyblog.com I advise clients on properties all day long and along my profitable portfolio I help people with property deals, letting, management and sales. Do you want to invest? Get in touch.
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