Buy-to-Let Bounces Back

Property investors bought more properties than they sold in the first Quarter of 2022 for the first time in six years.

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Buy-to-Let Investors Bought £8.5 Billion of Property

Buy-to-let property investors bought almost 14% of properties in the UK as landlords still view buy-to-let as a good investment. Property investors bought 42,980 homes across the UK worth £8.5 billion.

The share of properties sold by property investors decreased from 14% in Q1 2021 to 10% in Q1 2022, the lowest in 10-years, leading to an net increase of 13,480 rental properties.

The number of rental properties peaked in 2017 at 5.3 million, but fell to 5 million by 2021 caused by the changes to tax and regulation. Buy-to-let landlords are expected to continue investing into property throughout 2022 at the same rate as in Q1, but it is unlikely that this increased level make up for the loss of rental properties over the past 5 years to return the private rental stock to the levels at the peak in 2017.

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Average Rent in the UK Increases by 9.1%

The average rent increase in the UK by 9.1% year-on-year in March, with the average rent for a new let £1,115 per calendar month up from £1,022 in March 2021.

Rents outside of London increase by up to 14.9% as London was negatively impacted by private renters moving outside of the capital during the COVID pandemic.

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73% of London Based Landlords Investing Outside the Capital

Buy-to-let investors aren’t as keen on property in London, which produces lower yields with 73% of London based investors buying outside of the capital according to Hamptons.

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How to Get a Good Deal for an Investment Property in a Hot Market

The lack of property available in the secondary re-sale market has led to property investor paying more than the asking price for properties, impacting on their rental yield and having to pay a larger deposit.

Some property investors have also been put off by changes in the tax rules on mortgage interest, and upcoming rules on energy performance which could mean expensive upgrades.

What is the solution?

Buying property off-plan / under construction provide property investors with access to discounted property with developer incentives as owner occupiers tend to buy nearer to completion or once complete.

Buying property within a limited company will allow a property investor to offset their mortgage interest, providing a tax efficient method to invest in property. Click here to read more about tax efficient property investment.

New build property also has to adhere to strict Building Regulations standards and energy performance ratings, so rather than spending thousands upgrading an older property, property investors have the peace of mind of buying a fully compliant property that doesn’t need any capital expenditure. Click here to read more on the upcoming changes to energy performance regulations for rental properties.

Explore our range of UK property investments with high returns.