Why buy-to-let landlords are rushing to secure new properties

 In Property

There’s been an out-of-season rush on property purchases amongst buy-to-let landlords in the last couple of months. But, with so much doom and gloom in the news, what is it that’s pushing them back onto the market?

The impending stamp duty hike is likely to be a major factor. The move is part of a government initiative to bring more affordable homes onto the market, but has been criticised for disproportionately affecting buy-to-let landlords, who are currently one of the largest providers of affordable rented accommodation.

A 3% surcharge for buy-to-let investors is set to take effect from April and landlords are looking to optimise their portfolios before the change occurs. While demand for buy-to-let properties fell in December, it is expected to rise incrementally until April, before tailing off again thereafter.

Despite the change in legislation, demand for private rented property is still booming. The sector also appeared to show signs of stabilisation in terms of rent rises, with the frequency of rent hikes falling 5% in December alone.

Analysts predict that house prices could rise 4.5% each year on average for the next five years at least. And, with investors set to see an immediate increase of £7,500 on the price of a £250,000 home from April, many are bringing property purchases forward to the start of 2016.

However, with further changes resulting in many landlords now being required to pay over 100% of profits in tax, it would be recommended that buy-to-let landlords seek the advice of a professional accountant before putting their capital on the line.

If you want further expert financial advice for buy-to-let landlords, why not contact the friendly team at 3 Wise Bears today?

 

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