Is it still worth being a landlord

buy to let landlord
Sep 12 2017

Is it still worth being a landlord

For at least 20 years, investing in buy-to-let has been a relatively sensible secure way to increase your wealth, hence why many people become landlords to supplement their income or grow their wealth through property than shares. 

However, with all the recent changes to legislation and tax, is buy to let the investment opportunity it used to be?

Over the last couple of years, we have seen many changes to the sector, which could mean buy-to-let will no longer deliver the returns it did.

However in my experience there are still the same amount of people with the desire to become a landlord. When you look at the core of the industry the fundamentals still look solid and with an ever-growing demand from people looking to rent. Some very brief research shows that the average age of a first-time buyer in the UK is now 35, unless these people are living at home they need to rent a property from someone.

As a landlord myself, I can state that it can a rewarding experience and despite all the changes and additional costs, provide a steady and sustainable return as an income investment.

I have clients who are always on the lookout to expand their buy to let portfolio. Mortgage rates for buy to let are still at a low level and the number of financial institutes offering bespoke buy to let mortgages is ever increasing. However, make sure you crunch your numbers and double check your rates of return. I get many enquiries from landlords who want to evict their tenant because the numbers don’t stack up and they need to either increase the rent or sell the property.

I am no financial advisor but would recommend planning for a couple of percent increase in rates just to be safe.

Look back to 2007 and see how many private landlords were buying houses prior to the credit crunch and then had to sell as mortgage rates rose. If the government had not stepped in with a revised base rate, then many would have had to sell up.

To summarise even considering the recent tax changes and potential for buy-to-let mortgage costs to rise, there are numerous positives from being a private landlord assuming you do it correctly and get impartial support and advice when needed. I would recommend attending a local property meet and chat to other private landlords. We have become a nation who has no choice but to rent, eventually the culture will catch up and it will be acceptable to rent for a lifetime. With greater demand from tenants, rents that should rise with inflation and the long horizon for interest rate rises, do your due diligence and become a landlord. Should you ever get in the situation where you have a problem tenant that you feel you need to remove, then please call us for free advice as evicting a tenant incorrectly will costs you time and money.

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