Landlord News

Buy-to-Let Continues to be a Lucrative Business Despite Recent Changes

Andrew Truglia - July 2, 2019

Residential property is still the best, least volatile long-term investment, even when Brexit, buy-to-let tax relief changes, and other legislative changes are considered, according to a recent survey of 5,000 investors.

The survey, conducted by Benham and Reeves, found that 73% of those asked considered the private rented sector (PRS) to be the best form of long-term investment. 

Whilst landlords may have been concerned about the Tenant Fees Ban and the phasing out of buy-to-let tax relief, as well as the looming threat of a no-deal Brexit, it would appear that most feel safe enough to ride out any potentially turbulent times ahead. 83% of surveyed investors said that it was unlikely or very unlikely that they would sell their property in the next year.

Staying put doesn’t necessarily mean confident however, with only 21% saying they would consider investing in a property in the next 12 months. This is probably linked to the fact that 80% of those surveyed admitted that they were unfamiliar with the latest changes to the buy-to-let market. 

This suggests that there is some short-term uncertainty in the PRS, but overall confidence in the future of the sector remains strong.  

Director of Benham and Reeves, Marc von Grundherr, said: “The government has really gone to war with buy-to-let investors of late and a consistent string of detrimental changes to the sector through stamp duty increases, tax relief changes and a ban on tenant fees has had the desired impact of denting industry sentiment and dampening appetite for future investment due to a reduction in profitability. 

“However, for the institutional buy-to-let investor, this is but a mere blip on a much longer timeline and the overwhelming overtones are that while Brexit poses a challenging obstacle for the immediate future, the market remains the investment option of choice with many confident on a return further down the line. 

“This is a testament to the durability of buy-to-let bricks and mortar in the UK as, despite a government-backed clamp down, it remains a lucrative business and one that continues to gain the backing of those that are on the frontline.”