15th March 2017
Buy To Let remains a safe long-term investment
Buy-to-let investment in the long-term still has strong potential to beat savings rates by a significant margin over the coming years, despite tax increases, according to Allsop’s latest Rent Check report, a barometer for the rental market in England and Wales.
Having long provided impressive returns for investors, investment in buy-to-let has outperformed all major asset classes in recent years, and despite widespread concerns that various tax measures introduced by the government to curb its growth will end the buy-to-let windfall, many landlords believe that the sector remains a safe long-term bet.
The survey of over 1,500 landlords reveals that 37% of landlords anticipate growing rents over the next six months, a year-on-year increase of 36%, while 44% of landlords had ‘good’ or ‘very good’ expectations for their own letting portfolio over the next three months.
However, despite good long-term investment prospects, the percentage of landlords intending to purchase one or more property in the next 12 months dropped to 16%, the lowest level in just over four years, since the Rent Check begun in the autumn of 2012. Some 83% of landlords reported that obtaining buy-to-let finance had become more difficult in the last six months.
For those with equity to invest, Buy To Let returns still have the potential to outstrip savings accounts over the long term. Whilst tax changes and toughening lending criteria is challenging landlords, most are in it for the long term and only a small minority are expected to exit as the tax changes feed through.
With no quick solutions to the housing crisis, long-term private landlords providing decent accommodation will continue to play an important role in housing our population. As long as there are no new tax rises targeting landlords, buy-to-let will remain a stable and attractive sector for long-term investors.