Significant increase in first-time investors in buy-to-let sector

A new report has stated that there has been a significant increase in the number of first-time investors in the buy-to-let sector over the past year.

This is despite various tax changes, political and economic uncertainty and tougher mortgage lending conditions.

Buy-to-let specialist, Sequre Property Investment, revealed that new investors entering the market accounted for 61% of their property sales in the 12 months to March 2017, up 15% year-on-year.

Over a quarter, 26%, of those surveyed stated the they had chosen to invest in the buy-to-let market in hopes of generating a secondary income, 23% were doing it for retirement, 18% wanted to start their own property portfolio and 14% had opted to invest for inheritance purposes.

Secure Property Investment reported a 14.8% increase in overall sales over the past 12 months despite the introduction of the 3% stamp duty surcharge on additional properties, which came into force in April 2016, and the reduction in mortgage interest relief. The mortgage interest relief is being phased in from now until 2010.

Graham Davidson, Managing Director at Sequre Property Investment, said:

It’s clear that many investors and landlords remain undeterred from investing in property and are buying wisely to mitigate the changes.

Investors had over a year to prepare for the stamp duty changes and were also given plenty of time to adjust to the revised stance on tax relief, however the level of enquiries we’re receiving are at an all-time-high.

He continued:

Low mortgage rates and rising house prices have both resulted in favourable market conditions for landlords. Savvy investors understand that purchasing buy-to-let property which produces strong yield returns from the rental income is crucial, as is choosing the right property type and location.

A shortage of housing supply in many large cities has continued to keep rental demand high, and these factors are all key attributes of a successful buy to let investment which many novice investors have been keen to take advantage of.

Buy-to-let property in central locations with high yields and great scope for capital growth results in investors continuing to make a sizable profit even with additional tax payable.

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