Changes in the UK Buy-to-Let Market | Five things you need to know

Changes in the UK Buy-to-Let Market | Five things you need to know

Changes in the UK buy-to-let market | What you need to know

Whilst still abundant in investment potential and return, there are changes afoot in the UK buy-to-let market, meaning that investing in the UK isn’t quite as simple as it used to be.

Whether you’re developing your existing portfolio, considering investing for the first time, or find yourself renting out a property you have inherited, here are five critical considerations that need to be taken into account.

Right to Rent Checks

Legislation was introduced this year requiring landlords to conduct a Right to Rent check against applicants to confirm their residential status in the UK, with fines of up to £3,000 for landlords who fail to conduct the checks and are found to be letting their investment property to a tenant illegally residing in the UK.

This is a particularly important consideration for landlords managing their own portfolios, as most managing agents will conduct checks as part of the overall referencing process.

Post-Brexit vote stability

Despite the stamp duty announcement back in April and the uncertainly of Brexit before and after the vote, the house prices have remained stable. In fact, the three most prominent house price indexes have reported a 1.6% increase in average house prices.

There hasn’t been a noticeable slowdown in the buy-to-let market either, with a 30% increase in enquiries from investors in Q2 and Q3, reports Rightmove.

Mortgage interest relief

The National Landlords Association reported recently that c500,000 landlords will be pushed into the higher tax bracket as a result of upcoming changes in mortgage interest tax relief.

From April 2017, the amount of relief landlords can claim will steadily reduce until 2020, when costs will only be deductible at the basic rate of 20%.

The ‘wear and tear’ allowance for landlords letting furnished properties has also changed.

Stamp duty is more expensive than it used to be

A 3% surcharge was added to each band in April, adding a significant chunk into the costs of buying an investment property. As an example, a home costing £200,000 now attracts a £7,500 duty compared with only £1,500 before the changes.

Inheritance properties are not currently subject to stamp duty charges.

Autumn means Statement

A new Chancellor, and a new statement, with potentially more changes on the horizon for the buy-to-let market. Chancellor Phillip Hammond will announce the Autumn Statement on November 23rd.

Complete Prime Residential are global residential investment asset specialists, offering an end-to-end lettings and property management process that is the ideal support for international property investors seeking to build wealth through smart real estate investment.

Follow our insights, see the Complete Difference for Landlords and Investors or contact us to discuss the management of your UK and overseas investment portfolio.




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