Are you sure you want to delete your account?
You have indicated you do not agree to our terms of use, do you wish to delete your account?
Why not sign up?

You will also be registered for the agent to contact you via other means you provide, with information relevant to your property search.

There was an error creating your account, please try again. If the problem persists, please contact us and we will investigate.
Password does not match
How would you like to be contacted?

Mar 18 2016

Buy-To-Let Lives!

There is plenty of doom and gloom around concerning the tax changes to be made in April, and that as a result people may well consider that property is not as lucrative as it used to be with regards to returns on investment.

True, buy-to-let landlords are certainly facing a battering from the Chancellor, who apparently has a “50p size hole in his £100 purse” he needs to fix.  However, all is not as dark as it seems by any means, as the trick when looking to be successful in buy-to-let investment is not about putting in lots of money but the minimum needed as far as lending is concerned.

Typically, you need to put 25% into a buy-to-let investment, with the mortgage company lending you the rest; and we have heard on the grapevine that there are some mortgages coming on to the market only requiring a 20% deposit.

Carrying out some basic maths will tell you that if you were looking at a purchase price of £100k (rather unrealistic as far as London is concerned!), you only need to make a £25k deposit.  As long as all the factors stack up – you are reasonably solid financially, have a good credit rating, are looking to rent it out for more than enough to cover the mortgage payments etc., and that’s all the lender is looking for – then they will advance you the £75k.

Now, if the property goes up just 1%, effectively, you get a 4% return because you only put in £25k of your money but you get 1% on the whole £100k.  Furthermore, confident predictions from various sources are that because there is such an incredible shortage of property in the UK, especially in London, property prices will go up by 25% over the next 5 years; with similar figures making a 100% return on investment!

Examining it closely, or even not very closely, where else will you get those kinds of returns on your money?  Whilst the proposed tax changes could make a dent in your monthly profit on investment on rental yields the long-term picture – and you need to view the long-term in the value of property – clearly shows that no other investment vehicle performs as positively as property.

Follow us