Property Investments
Last year, there was an increase of 20% in the number of landlords investing in investment property for the purposes of buy-to-let, according to statistics from The Landlord Syndicate.
The Landlord Syndicate are an organisation representing landlords across the UK, they have commented on tthe recent boom in buy-to-let property investments, stating prospective landlords should carefully consider personal financial circumstances, affordability, location and the ability to commit to a long-standing investment, to fully take advantage of the current market. The recent decrease in house prices combined with high rental prices offer the perfect opportunity for investors to make high profits in a buy-to-let transaction.
Simon Thompson, Chairman of The Landlord Syndicate said: “Before the recession, rising house prices fuelled investors, who were really speculators, to buy ‘discounted’ flats. The resulting house price crash left many of them holding property that would never pay for itself by rents because too many similar properties were grouped in a development, pushing down yields and prices.”
The body urged prospective landlords, and those looking to increase their portfolio, should commit to long-term yields, only considering sensible mortgage and finance options, research low rents and maintain to increase rents steadily as the market progresses, to fully optimise earning potentials in the long term.
A spokesperson for the organisation said: “Today 25 per cent of the new-buy properties we reference are houses compared to two years ago. These are mainly traditional three bedroom semi-detached or terraced properties and houses in multiple occupation, subsequently the number of tenants we reference with children has also increased by 30 per cent in the last 12 months.” He also commented that the regulations surrounding buy to let mortgages will become increasingly monitored over the next ten years.
Professional bodies are aiming to protect landlords during the property boom. Inexperienced landlords may not be fully covered, nor have complete understanding of contemporary guidelines and regulations, urging even the most experienced of landlords to ensure they are up to date with current situations. Overall, landlords need to be more aware of their sector than they have needed to be in the last 20 years. Failing to protect or licence HMO properties can result in heavy fines, wiping out the prospects of any financial gains in the near future, and tax implications are complex and possibly financially lethal.
Keeping yourself well educated and up to date with landlord issues, tenancy rights and renting formalities can really help you through the buy-to-let boom. As property investment increasingly becomes a promising investment option, it is easy to be blinded by lucrative income, high profit margins and short term gains, however providing yourself with enough knowledge and know-how to weather any short comings, finance lapses or loopholes in the system can really make the difference between short term benefits and a financially viable long term future as a property investor.
Georgette Adanas has been writing articles or reviews on <a href="investment property“>making a will since 1999.
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