Buy-to-let clampdown: what it means for landlords
According to the The National Association of Estate Agents (NAEA), demand for residential property surged to a 12-year high in February. This is because buy-to-let investors were rushing to beat the 3% stamp duty rise for second homes that came into effect this month (April).
Over 85% of estate agents reported a surge in activity from buy-to-let landlords just prior to the stamp duty increase. But what does this mean for the sector, now that the increase is in place?
It is clear that purchasing buy-to-let property will be more costly, and gaining the finance to do so will be more difficult because of the strict new affordability criteria set out by the Bank of England.
This new, harsher, buy-to-let landscape means that investors must be extra-vigilant about the way they manage their rental properties to ensure they are running profitable businesses. Consider ways to boost income, such as:
- Providing for regular rent reviews within tenancy agreements
- Undertaking improvements to the property to attract a higher rental price
- Raising rents in line with market values, where permitted according to the tenancy agreement
- Claiming all legitimate expenses to offset tax payments
To make sure your buy-to-let investments continue to generate healthy profits, you should consider working with a specialist landlord accountant. Give us a call on 020 3102 4755 if we can help.
