Is now the time to extend your portfolio?

It’s a question that’s probably asked all through the year, most years, as successful landlords contemplate the right time to extend their business and portfolios. There are risks, of course, given that the wrong location or time may result in empty properties and uncollected rents.

Is now the time to extend your portfolio?

More recently, you’d absolutely be forgiven for asking yourself the question and giving yourself an emphatic ‘no’, with the government seemingly using the last two years to nominate landlords and property investors as a tax punchbag.

Rule changes, changes in the law, changes in legislation and other moves means that it has become harder than at any other time in the last 20 years to be a professional landlord without becoming swamped in admin and tax liabilities.

This isn’t to say that things aren’t markedly more complicated than they were even five or ten years ago, but also that we were, to some extent, still recovering from the 2008 financial crash. Incomes hadn’t massively recovered, people were still fairly set in the mindset of property ownership as the ultimate goal, and there were many rogue landlords around giving the industry a bad name.

With that out of the way, however, we’re now interested in looking at some of the best reasons why now is the time to make your move and expand. What could possibly go wrong in a year of a global pandemic and historic economic turmoil you ask? Well, let us show you the best reasons to be optimistic.

Stamp Duty Relief

Ok this is a big one, so let’s not beat around the bush here, this is going to be huge for landlords and probably the biggest piece of government help they’re likely to receive for some time.

As the FT noted, “Slashed stamp duty, better mortgage deals and new tax benefits all mean landlords are flocking back to the market.”

It could potentially save landlords thousands when buying property, and when considering the long-term implications of capital appreciation, house price increases, low interest and better yields, you’ll struggle to find a better reason to take the leap than this.

Historically low interest rates

The Bank of England base rate is currently 0.1%, yes you did read that correctly. It’s highly unlikely, that in a year’s time and beyond that you’re ever likely to see rates this low again.

It’s tantamount to lenders paying you to borrow money, and so long as you’re receiving good rental yields on your property, then you pretty much are.

Of course, yields will vary with area, amenities and so on, but it’s pretty nailed on at the moment that you’ll find yields higher than the average BTL mortgage rate more or less anywhere.

If you can get these rates locked down, considering that average property price growth is looking to be 3% for the rest of the year, compare that with the cheapest Lloyds BTL mortgage rate of 1.9% fixed until 2025, you can see how the numbers begin to stack up.

Demand

Finally, demand is absolutely taking off. Anecdotally at least, it’s not hard to find stories being reported by agents, online sellers, and Zoopla and RightMove, of unprecedented demand for rental property.

Even without a global pandemic it’s becoming clear that generation rent are here to stay and that’s simply down to demographics, incomes and house price increases. Supply can’t really ever hope to meet demand whilst things continue as they are, and that’s why you’ll find almost consistent rental growth with higher occupancy rates and longer tenancies.

Nobody can see into the future, but the present is calling, and it’s got a pretty good deal to sell you!

Looking to invest in buy-to-let? Browse our portfolio and speak to a consultant today about your options.


Leeds Guide vertical - April 2019

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