The UK buy-to-let property market has undergone significant changes in recent years, with government policy and economic factors reshaping the landscape. While some investors have been deterred by these changes, others have persevered and continue to see the potential for strong returns and income when investing in UK property.
We can see from the interactions that we have with our clients on a regular basis that the demand for buy-to-let in the UK remains extremely strong and, in fact, most now recognise that UK property falls into an increasingly slim band of reliable investment assets that appreciate in value and offer a strong passive income too.
Changes in the property market
One of the most significant policy changes for those investing in UK property in the last few years has been the introduction of stamp duty land tax (SDLT) on second homes and buy-to-let properties. While this policy change has certainly had some impact on investor sentiment, many still see buy-to-let as a viable investment. The attraction of a steady rental income and the potential for capital growth remain key benefits, and many investors feel that the long-term rewards more than justify the upfront costs.
Another key factor affecting the UK buy-to-let market in recent years has been the ongoing economic uncertainty, particularly around Brexit. At the same time, most investors have seen the uncertainty as an opportunity. They believe that the demand for rental property will continue to grow as younger generations struggle to get onto the property ladder and that the potential for long-term returns outweighs the short-term risks.
There have been positive changes to the regulation of the sector, designed to improve standards and protect tenants. The introduction of mandatory HMO (houses in multiple occupation) licensing, for example, means that landlords renting properties to multiple tenants must now obtain a license from their local council. There have also been proposals for a national register of landlords, which would require landlords to provide more information about themselves and their properties.
The introduction of more regulation has, at times, been spun negatively by those outside the sector, however, most landlords and investors see more protection for renters and owners as a positive move. The buy-to-let market remains a popular investment destination for many due to strong rental yields and capital growth, combined with the relative stability of the UK property market.
Is it still worth investing in property in the UK?
One factor that has helped to cushion the impact of policy changes on the sector is the growing sophistication of the buy-to-let mortgage market. Lenders have adapted to the changing landscape, offering products and services that help investors to navigate the complexities of the market.
For those that are already invested in the market, it’s reassuring to see a continued and steady stream of new, committed investors that recognise the health and potential of UK property and buy-to-let.
Ultimately, the UK property market has almost always been, and continues to be one of the most reliable and profitable investment markets around, and it will almost always be worth investing in UK property.
If you’d like to speak to us about the potential to make the most of the current UK property market then why not get in touch with us today?